Don Farmer's Passive Activity Losses: Navigating Real Estate & K-1Limitations

Overview

This course explores the complex passive activity loss (PAL) rules under §469 with a focus on real estate activities and partnership K-1 reporting. Participants will learn how material participation, real estate professional status, grouping elections, and disposition rules affect the deductibility of losses. Practical examples demonstrate how PAL rules interact with basis, at-risk, and §461(l) limitations.

Highlights

• Passive activity loss (PAL) rules under IRC §469 • Passive versus nonpassive activity classification • Material participation and real estate professional requirements • Partnership K-1 reporting and common PAL pitfalls • Coordination of PAL rules with basis, at-risk, and §461(l) limitations • Disposition rules and strategies for utilizing suspended passive losses

Designed For

Tax Professionals

Objectives

1. Distinguish passive from nonpassive activities under §469 2. Apply material participation tests and real estate professional rules 3. Analyze K-1 reporting and common PAL traps 4. Coordinate PAL rules with basis, at-risk, and excess business loss limitations 5. Identify planning opportunities to unlock suspended passive losses