Thursday, April 16, 2015

From The Boston Tax Institute

Lucien Gauthier has given me permission to reprint his e-mails to his customers.  Here is the latest.

In Larry Williams v. Comm., TCM 2015-76 (04/16/15), the Tax Court applied Reg. 1.469-2(f)(6) to recharacterize the net rental income from rental real estate, which was rented by an S corporation which was wholly-owned by the taxpayer to a wholly-owned C corporation in which the taxpayer materially participated, as NONPASSIVE income.  If the taxpayer had owned the rental real estate individually or perhaps though a single member LLC, there would have been no question that -2(f)(6) applied, and the Tax Court concluded that owning the rental real estate through a wholly-owned S corporation should not change this result.  Sections 469 and 1411 may be the two hottest areas of tax practice today.  If you would like to learn more about section 469 from a Tax Attorney/CPA with two masters degrees in taxation and 28 years of experience with section 469, please attend our full day seminar on May 27 entitled Passive Activity Losses at the Hyatt house in Waltham!!!           

I'm behind on my reading thanks to tax season.  There is a good chance that I will find the Williams case to be forbes worthy. 

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