Passive Activity Loss

[JG EA]

Would someone please explain to me what the news TTB released about "Definition of Limited Partner for Passive Activity Loss Rules" means?

It is talking just about taking passive losses by not being a limited partner , but nothing about whether it is SE, right?

The proposed regulations for not being classified as a limited partner seem confusing to me.

[appelman]

Take a look at these:

http://www.gpo.gov/fdsys/pkg/FR-2011-11-28/html/2011-30611.htm

http://www.taxlawroundup.com/2011/11/irs-revamps-definition-of-“limited-partner”-for-section-469-passive-activity-loss-rules/

http://www.dlapiper.com/proposed-regulations-redefine-limited-partnership-interest-under-passive-loss-rules/

http://www.mondaq.com/unitedstates/x/157122/IRS+HRMC/IRS+Proposes+Change+Affecting+Partnership+Losses

https://www.reznickgroup.com/.../limitedpartnershiprules_dec022011.pdf

[JG EA]

The IRS explanation of the Proposed Regulations specifies that rights to manage include the power to bind the entity, but the extent of other management rights that would satisfy this test is not completely clear. A managing member would almost certainly qualify, but it is not clear whether a member that has only approval rights over certain matters would be considered to have rights to manage the entity.

The definition of limited partnership interests in the Proposed Regulations applies solely for the purposes of Section 469. No inference is intended that the same rules would apply for any other provisions of the Code requiring a distinction between a general partner and a limited partner.

Thanks - this part helped the most.