Upon successful completion of this course, participants will be able to:

• 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.
• Recognize a taxpayer’s material participation in an activity by:
  • Identifying the material participation tests and their application to entities such as partnerships and corporations;
  • Specifying the activity grouping rules noting exempt activities;
  • Determining passive activity particularly, the treatment of rental activity as passive; and
  • Identifying “nested” activities.
• Identify special passive loss rules and calculations by:
  • Determining alternating use affects on amount realized and adjusted basis and citing additional loss limitations outside of §469;
  • Recognizing requirements for the special $25,000 allowance; and
  • Specifying recharacterization rules and their purpose.
• 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.