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Originally posted by solomon View PostThanks again. That Court case shed some light on it for me.This post is for discussion purposes only and should be verified with other sources before actual use.
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Originally posted by BOB W View PostThe problem is, it leaves me unsure of everything.......................hope you can pick out the right pieces.
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Originally posted by solomon View PostWell, leaving out the investment or appreciation portion of the case - which I understand - what turned a light on for me was that Sections 280A and 183 are not mutually exclusive. I was trying to make those two Sections an either or proposition.Last edited by BOB W; 12-10-2007, 09:50 PM.This post is for discussion purposes only and should be verified with other sources before actual use.
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Originally posted by Bees Knees View PostThe problem is, you have to decide which rule applies to a below market rental. A below market rental could be considered a not for profit activity, depending upon facts and circumstances, and thus Section 183 would kick in and limit expenses to income. However, if that below market rental were to a relative, then Section 280A(d) would kick in and treat it as if it was YOU living there, thus, no expenses allowed (other than mortgage interest and RE taxes) because you can’t pass the exclusive use test under the office in home rules.
THAT is the difference.Last edited by skhyatt; 12-10-2007, 10:07 PM.
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Originally posted by BOB W View PostPlease explain what that was all about............... Do we get to write off up to the extent on income or not?
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That is what I've been saying all along. To read the case left me confused and I didn't want to only pick the pieces that fit my concept. The biggest hurdle I had was taking a jump that "not for profit rental" meant below fair market value rent.
Bees confirmed that that was his concept also. Having the Pub talk about "Not for profit rental" and saying you can deduct expenses up to income made me feel sure that it was allowed.
I was never good at reading court cases due to following their line of thinking and then coming up with a completely different outcome.
Oh well< I'll stick to the Pubs, they are written for people like me.Last edited by BOB W; 12-10-2007, 11:00 PM.This post is for discussion purposes only and should be verified with other sources before actual use.
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I read the court case as follows: That is to say, below fmr is personal use regardless who is the tenant and not regarded as a not for profit activity based upon being a rate below fmr - Sec. 280A applies to this situation.
Rent at fmr without a demonstrated profit motive would constitute a not for profit activity subject to Sec. 183.
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Originally posted by solomon View PostI read the court case as follows: That is to say, below fmr is personal use regardless who is the tenant and not regarded as a not for profit activity based upon being a rate below fmr - Sec. 280A applies to this situation.
Rent at fmr without a demonstrated profit motive would constitute a not for profit activity subject to Sec. 183.
WOW, That is kind of what I read, somewhat, but it still doesn't make sense. There still has to be more to this than that. Again, the Pub says BFMR you can deduct expenses up to your income...... And that contradicts what you are saying. How would you explain "Not for Profit Rental" as talked about in the PUB?
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Rent at fmr without a demonstrated profit motive would constitute a not for profit activity subject to Sec. 183. Quote:
Is this what you mean is "Not for profit rental"> no profit motive????????????Last edited by BOB W; 12-10-2007, 10:56 PM.This post is for discussion purposes only and should be verified with other sources before actual use.
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Originally posted by BOB W View PostWOW, That is kind of what I read, somewhat, but it still doesn't make sense. There still has to be more to this than that. Again, the Pub says BFMR you can deduct expenses up to your income...... And that contradicts what you are saying. How would you explain "Not for Profit Rental" as talked about in the PUB?
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Rent at fmr without a demonstrated profit motive would constitute a not for profit activity subject to Sec. 183. Quote:
Is this what you mean is "Not for profit rental"> no profit motive????????????
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Solomon, in TTB, 7-7 under the section, "Did you know?" It says if considered personal use, then no expenses are deductible, but income must be reported. Isn't that talking about only the period during the year where use is considered personal? That's the way I read Sec 280A(d)(2). I'm trying to reconcile this section with the section above on that same page, "Allocating expenses:Personal vs Rental"
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Originally posted by skhyatt View PostSolomon, in TTB, 7-7 under the section, "Did you know?" It says if considered personal use, then no expenses are deductible, but income must be reported. Isn't that talking about only the period during the year where use is considered personal? That's the way I read Sec 280A(d)(2). I'm trying to reconcile this section with the section above on that same page, "Allocating expenses:Personal vs Rental"
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