By Samantha Ramirez, CPA, Manager, Tax & Advisory
ASL Real Estate Group
General Passive Rules
The general passive activity rules under Internal Revenue Code Section 469 define passive activities as any trade or business in which the taxpayer does not materially participate, OR a rental activity without regard to the level of participation. Passive activities that produce losses, can only be offset against passive income. If the taxpayer has no passive income, the losses will be suspended until the activity is sold in a taxable transaction. (more…)
By Samantha Ramirez, CPA, Tax Manager
ASL Real Estate Group
A like-kind exchange, commonly referred to as a “1031 exchange”, allows for the deferral of gains from the sale or exchange of business or investment property, as long as the exchanged properties are considered like-kind. Any money or property received that is not like-kind is ineligible for gain deferral and is considered a taxable event. After the 2017 Tax Cuts and Jobs Act (TCJA), the classification of like-kind was limited to include only real property. With the new, narrower definition of like-kind, the IRS issued proposed regulations in June 2020 that defined real property for the first time for purposes of Internal Revenue Code Section 1031. Recently, the IRS issued final regulations that adopted most of these proposed regulations, with some notable changes and clarifications. Below is a summary of the most recent changes. (more…)