Once participants have completed this session, they should be able to:
- Identify what activities are subject to the PAL rules and the exceptions to them including those for certain real estate professionals.
- Define a passive activity, rental and trade or business under IRC 469.
- List the seven ways to materially participate in an activity and the six exceptions to the definition of a rental activity.
- Calculate the passive activity income and losses allowed and the tax ramifications of passive activity dispositions.
- Recognize what passive activity investments are potentially subject to the 3.8% net investment income tax under IRC 1411.
The Tax U More With This Vendor
Tax professionals that need an in-depth training course on the passive activity loss rules and how they apply to certain investments in trades or businesses and rental activities.
Garverick, J Patrick
Pat Garverick is a Certified Public Accountant (CPA) who began his career in public accounting in 1988 after obtaining his Bachelor of Science in Business Administration (BSBA) in Accounting from The Ohio State University. After receiving his Master of Taxation (MT) degree from Arizona State University in 1992, Garverick began operating his own tax and financial planning business. He also started writing, reviewing, and teaching tax and financial planning continuing professional education courses around the country. In addition to being a CPA, Garverick is also a Certified Financial Planner (CFPÂ®). Garverick has presented continuing education sessions throughout the country and has won awards for both his skills as an instructor as well as for the content he has created. During his time in college Garverick earned a letter as a member of the Ohio State Basketball squad. He remains a staunch supporter of the sports programs at his alma mater, OSU.
Each attendee will receive the most comprehensive passive activity reference manual with numerous practice aids and real-world examples. Topics include but are not limited to:
- Detailed coverage of the passive activity rules under IRC 469 (and related regulations), how the 3.8% net investment income tax under 1411 and qualified business income (QBI) deduction under 199A applies to rentals and passive activities, and what is a trade or business rental is under 162.
- How the PAL rules apply to rental real estate activities and investments in S corporations and partnerships.
- Definition of an activity and the activity grouping and disclosure rules.
- Real estate professional exception to the PAL rules for investments in non passive rentals.
- Special $25,000 loss allowance for rental real estate with active participation.
- Material participation safe harbor rules.
- Events that trigger suspended PALs.
- Limitations on tax credits generated by passive activities.
- Special rules that re-characterize passive income to non-passive income.
- What rentals are subject to self-employment tax under 1402.