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 Statute 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 Statute 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 otherwise 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

* 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 passive losses under Statute 469 and necessary Statute 469 calculation steps and specify the Statute 469 & Statute 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 affects on amount realized and adjusted basis and citing additional loss limitations outside of Statute 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 Statute 469.

 Revision Date: 3/26/24

Additional Contents : Complete, no additional material needed
Advance Preparation : None
Intended Participants : Any CPA looking to maintain or enhance their professional competence
Course Declaration : Participants must complete the final examination within one year of purchase. A minimum passing grade of 70% or better is required to receive CPE
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