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TOPIC: passive loss rules
#6691
taylorlloyd ()
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passive loss rules 2 Years, 7 Months ago Karma: 0  
we own and actively many rental properties including single family, apt and commericial. my commericial properties are held in S-corp but apt and sfd in LLC. i work another full time job in which my income exceedes the IRS allowable level in order to maximize tax deductions on our LLC held rentals, even though we actively manage, rehab, repair, etc. and have done so for over 15 years. my question is if there is any way to hold rental real estate in an S-corp or if it would be of any value for my wife to become certified and credentialed as a realtor or broker in order for us to take full advantage of the tax losses and write off's associated with the rental property. thanks for advice.
 
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#6693
adminchat ()
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Re:passive loss rules 2 Years, 7 Months ago Karma: 2  
Hi Lloyd,
Those are great questions, but they are beyond my scope of expertise. I would consult with a tax professional.
I had heard that holding real estate in an S-Corp is possible but you are subject to double taxation. Not sure if that is true or not. I hold mine in an LLC and have not had any problems.
Good luck, and let us know what happens.
 
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#6747
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Re:passive loss rules 1 Year, 8 Months ago Karma: 0  
The Revenue Reconciliation Act of 1993 has a major impact on some real estate professionals who own rental or investment real estate.
Since 1986, the Passive Loss Rules limited the deductibility of losses from rental real estate. All real estate rental was classified as a passive activity. Passive losses are subject to stringent rules regarding deductibility.
Special rules allow deduction of up to $25,000 of real estate rental losses if other income is less than $100,000 (when the special allowance begins to phase out - it is eliminated when income exceeds $150,000).
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