New client. TP age 89 (owner of residential rental) living in Assisted Living Facility for 3 yrs now. On 2012 Sch E, CPA has TP active participate. TP said their kid helps. Read TTB 7-13 and reads as even though kids helps, TP can claim active participation.
-
-
Active Participation
Here's the definition of active participation from IRS Publication 527:
- - - - -
Active participation. You actively participated in a rental real estate activity if you (and your spouse) owned at least 10% of the rental property and you made management decisions or arranged for others to provide services (such as repairs) in a significant and bona fide sense. Management decisions that may count as active participation include approving new tenants, deciding on rental terms, approving expenditures, and other similar decisions.
- - - - -
It is clear from this definition that one may actively participate in the rental activity without ever visiting the property, and without ever communicating directly with the tenants.
In the case described here, I think the question is how much decision-making authority has been delegated by the taxpayer to someone else.
BMKBurton M. Koss
koss@usakoss.net
____________________________________
The map is not the territory...
and the instruction book is not the process.
Comment