With the adoption of the passive loss limitation rules, taxpayers are looking to CPAs for guidance related to what deductions are allowed, disallowed, or suspended. Updating practitioners on the practical aspects of §469, this course addresses the needed skill to handle these pragmatic issues. Fundamentals are reviewed, planning opportunities are identified, and creative strategies are discussed and evaluated along with remaining traditional approaches. The goal of this instructive course is to understand and solve client problems under §469, with emphasis on tax savings ideas. Participants will learn to master the proper administration of these complex and often cumbersome provisions.
Assignment
At the start of the materials, participants should identify the following topics for study:
* Passive loss rules
* Material participation
* Activity definition
* Passive & nonpassive activities
* Passive activity loss
* Rental activities
* Recharacterization of passive income
* Passive activity credits
* Passive activity audit guide
* At-risk limits
Learning Objectives
After reading the materials, participants will be able to:
1. Identify affected taxpayers, categories of income and loss, the impact of gifting passive property, and the ordering of passive losses under §469.
2. Recognize a taxpayer’s material participation in an activity by:
a. Identifying the material participation tests and their application to entities such as partnerships and corporations;
b. Specifying the activity grouping rules and exempt activities;
c. Determining passive activity particularly, the treatment of rental activity as passive; and
d. Identifying “nested” activities.
3. Identify special passive loss rules and calculations by:
a. Determining alternating use effects on amount realized and adjusted basis and citing additional loss limitations outside of §469; and
b. Recognizing requirements for active business recharacterization (12-month test).
4. Recognize the passive activity audit guidelines identifying audit issues, determine the real estate rental activity credit exception, and cite the at-risk limit rules as they relate to §469.
To complete this course participants need to: Read the material provided and answer chapter review questions, successfully complete the qualified assessment with a minimum of 70% accuracy to receive your certificate. In Addition, no correct or incorrect feedback for any exam question will be provided.
Upon course completion A course evaluation form is provided for your feedback.
Participants have 1 year from the date of purchase/enrollment to complete this course
CPE Prime is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: www.nasbaregistry.org