IS: PAL and Rental of Real and Personal Property

General Description:

This class is designed to explore the elusive term of trade or business for purposes of §469, and how the definition of a trade or business affects a Real Estate Professional (REP), a rental activity, a rental real estate activity, the ability to materially participate, determining whether the income or loss is active or passive, self-employment income, and the schedule used to report the income or loss.

Learning Objective:

After completing this course the participant will be able to:

• Determine how to deal with the rental of real property, including:
• Rental real estate activity, the effect on a REP, and active participation by an individual who is not a REP;
• If the rental of real property is not a rental real estate activity, the effect of material participation, REP status, AGI, deducting a loss, and treating the profit as self-employment income;
• Vacation home, bed and breakfast, Airbnb, or Vrbo rented at a profit or a loss, and if a loss, how much of the loss is potentially deductible by a REP and by an individual who is not a REP;
• Rental of real property by an S corporation or a tax partnership and when the activity is listed on Schedule K, Line 2 (Form 8825) or Line 3 (Other Rental), and when it should be listed as a separate activity on Page 1.
• Determine how to deal with the rental of personal property (as opposed to real property), including the schedules to be used; when the loss is deductible; and, if the activity is profitable, when the income is self-employment income.
• Determine how to apply the self-rental rules, including defining a commonly controlled group, characterizing the income for purposes of the 20% deduction for Qualified Business Income, and determining how much income is subject to the 3.8% tax on Net Investment Income.

Instructors:

Mark A. Vogel is a retired professor and director of the University of Denver Graduate Tax Program, where for 38 years he taught courses in individual, fiduciary, tax accounting, partnership, and corporate taxation. He is the author of Divorce Taxation Guide (John Wiley & Sons) and Individual Taxation (Shepards/McGraw-Hill). He received a J.D. and LL.M. in Taxation from the University of Denver College of Law and an undergraduate accounting degree from the University of Notre Dame. He is also a CPA licensed in Illinois.

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