CPE Today Logo

Passive Loss & At-Risk Rules

Course - K2's Better Reporting With QuickBooks Online

Major Topics

Learning Objectives

  1. Identify affected taxpayers, categories of income and loss, and passive losses under ?469 and necessary ?469 calculation steps and specify the ?469 & ?1211 limits and the ordering and suspension of any disallowed losses.
  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 ad-justed basis and citing additional loss limitations outside of ?469; b. Recognizing requirements for the special $25,000 allowance; and c. Specifying recharacterization rules and their purpose.
  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.

Course Description

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.

Compliance Information

Advanced Preparation

None

Field of Study

Taxes

Credits

2.5 Credits

Published Date

January 27, 2023

Revision Date

March 25, 2024

Course Authors

Danny Santucci

Huntington Beach, CA
Author, Santucci Publishing

Danny earned his Bachelor of Arts in Political Science from the University of California at Irvine in 1969. He received his Juris Doctorate from Boalt Hall School of Law, University of California at Berkeley in 1972, at which time he began practice as a tax attorney in Southern California. His legal career started with the business and litigation firm of Edwards, Edwards, and Ashton. Later he joined the Century City entertainment firm of Bushkin, Gaims, Gaines & Jonas working for many well-known celebrities. In 1980, Danny established the law firm of Santucci, Potter, and Leanders, in Irvine, California. With increasing lecture and writing commitments, Danny went into sole practice in 1995. His practice emphasizes business taxation, real estate law, and estate planning.

About Instructor Read Less

Overview

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.

Course Details

  1. Identify affected taxpayers, categories of income and loss, and passive losses under ?469 and necessary ?469 calculation steps and specify the ?469 & ?1211 limits and the ordering and suspension of any disallowed losses.
  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 ad-justed basis and citing additional loss limitations outside of ?469; b. Recognizing requirements for the special $25,000 allowance; and c. Specifying recharacterization rules and their purpose.
  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.

Intended Audience

Advanced Preparation — None

Field of Study — Taxes

Credits — 2.5 Credits

IRS Program Number

Published Date – January 27, 2023

Revision Date – March 25, 2024

Course Authors

Danny Santucci

Huntington Beach, CA
Author, Santucci Publishing

Danny earned his Bachelor of Arts in Political Science from the University of California at Irvine in 1969. He received his Juris Doctorate from Boalt Hall School of Law, University of California at Berkeley in 1972, at which time he began practice as a tax attorney in Southern California. His legal career started with the business and litigation firm of Edwards, Edwards, and Ashton. Later he joined the Century City entertainment firm of Bushkin, Gaims, Gaines & Jonas working for many well-known celebrities. In 1980, Danny established the law firm of Santucci, Potter, and Leanders, in Irvine, California. With increasing lecture and writing commitments, Danny went into sole practice in 1995. His practice emphasizes business taxation, real estate law, and estate planning.

About Instructor Read Less