Passive Loss & At-Risk Rules

2 Credits: Taxes


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Passive Loss & At-Risk Rules

Course Level
CPE Credits

2 Credits: Taxes

Course Description

The complexity of §469 passive loss limitation rules presents a formidable challenge for both taxpayers and CPAs. This course tackles the intricate nuances of these rules, which often perplex practitioners with their myriad of deductions, disallowances, and suspensions. It agitates the problem by underscoring the critical need for expert guidance in navigating these convoluted provisions. The solution is provided through an in-depth exploration of §469, equipping participants with essential skills to address practical issues. The course focuses on reviewing fundamentals, identifying planning opportunities, and exploring both creative and traditional tax-saving strategies. This results in a comprehensive understanding and efficient handling of client issues related to §469, with a strong emphasis on maximizing tax savings.

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Learning Objectives

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.
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Course Specifics

Course ID
Revision Date
May 3, 2024

General understanding of federal income taxation.

Advanced Preparation


Number of Pages

Compliance Information

NASBA Provider Number: 103220
IRS Provider Number: 0MYXB
IRS Course Number: 0MYXB-T-02328-23-S
IRS Federal Tax Law Credits: 2
CTEC Provider Number: 2071
CTEC Course Number: 2071-CE-1897
CTEC Federal Tax Law Credits: 2

CFP Notice: Not all courses that qualify for CFP® credit are registered by Western CPE. If a course does not have a CFP registration number in the compliance section, the continuing education will need to be individually reported with the CFP Board. For more information on the reporting process, required documentation, processing fee, etc., contact the CFP Board. CFP Professionals must take each course in it’s entirety, the CFP Board DOES NOT accept partial credits for courses.

CTEC Notice: California Tax Education Council DOES NOT allow partial credit, course must be taken in entirety. Western CPE has been approved by the California Tax Education Council to offer continuing education courses that count as credit towards the annual “continuing education” requirement imposed by the State of California for CTEC Registered Tax Preparers. A listing of additional requirements to register as a tax preparer may be obtained by contacting CTEC at P.O. Box 2890, Sacramento, CA, 95812-2890, by phone toll-free at (877) 850-2832, or on the Internet at

Meet The Experts

Danny Santucci, BA, JD, is a prolific author of tax and financial books and articles. 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, and 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. Speaking to more than 100 groups nationally each year, he is known …