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Real Estate Professional Status Audits FAQ

March 25, 2014

How are rental activities defined?

A rental activity is any activity where gross income is derived principally from amounts paid by customers for the use of tangible property. However, an activity […]
March 25, 2014

What are the conditions of a passive activity deduction?

In order for a passive activity loss to qualify as a deduction it must meet one of two conditions. Either, it must arise in connection with […]
March 25, 2014

What is passive activity gross income?

Specifically passive activity gross income is income derived from work in which the taxpayer does not materially participate in. Nonetheless, in most situations this does not […]
March 25, 2014

What constitutes material participation?

Participation is defined as any work a taxpayer does in connection with an activity in which he owns an interest. However, to be material the taxpayer’s […]
March 25, 2014

How are passive activity expenses and losses characterized

Passive activity expenses and losses are those attributable to passive activities that generate income. Such expenses and losses can only be used to offset income from […]