GLOSSARY

accelerated depreciation: Annual depreciation calculated in such a way that deductions are higher than average in the earlier years and decrease in each subsequent year. Accelerated methods are not allowed for real property but can be used for other classes of property, such as landscaping equipment or vehicles used in real estate investment management.

active participation: The degree of involvement in managing property, to qualify to deduct net losses for tax purposes. This standard requires ongoing involvement in approving tenants, maintaining properties, and approving rent levels and major expenditures.

adjusted gross income (AGI): Gross income for tax purposes, before deducting tax exemptions and deductions.

adjusted purchase price: ...

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