Passive Loss and At-Risk Rules 2023 - 2.5 CPE
With the adoption of the passive loss limitation rules, taxpayers are looking to CPAs for guidance related to what deductions are allowed, disallowed, or sus-pended. Updating practitioners on the practical aspects of §469, this course ad-dresses the needed skill to handle these pragmatic issues. Fundamentals are re-viewed, planning opportunities are identified, and creative strategies are dis-cussed 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.
Completion Deadline & Exam: This course, including the examination, must be completed within one year of the date of purchase. In addition, unless oth-erwise indicated, no correct or incorrect feedback for any exam question will be provided.
Course Level: Overview. This program is appropriate for professionals at all organizational levels.
Field of Study: Taxes
Prerequisite: General understanding of federal income taxation.
Advanced Preparation: None
Learning Assignment & Objectives
As a result of studying the assigned materials, you should be able to meet the objectives listed below.
ASSIGNMENT
At the start of the materials, participants should identify the following topics for study:
* Passive loss rules
* Material participation
2
* 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, and pas-sive losses under §469 and necessary §469 calculation steps and spec-ify 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 is-sues, determine the real estate rental activity credit exception, and cite the at-risk limit rules as they relate to §469.
After studying the materials, answer exam questions 1 to 15.
Notice
This course and test have been adapted from materials and information contained in the above text and any supplemental material provided. This course is sold with the understand-ing that the publisher is not engaged in rendering legal, accounting, or other professional ad-vice and assumes no liability whatsoever in connection with its use. Since laws are constantly changing, and are subject to differing interpretations, we urge you to do additional research and consult appropriate experts before relying on the information contained in this course to render professional advice.
