Net operating losses and passive loss rules for real estate

Article Abstract:

Passive loss rules under Section 469 of the Code's effect to rental real estate endeavors and its interplay with net operating loss provisions of Section 172 are analyzed. It is discernible that once the interaction of Sections 172 and 469 are studied, the restrictive rules of Section 469 can lose its effect. Suspended losses and losses of rental activity sale can be enhanced before happening in a tax accounting sense.

Real estate, Real property, Business losses

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Foreclosure sale of real estate secured by recourse debt: tax policy after the Aizawa decision

Article Abstract:

The US Tax Court held, in Aizawa v Commissioner, that gains realized from a foreclosure sale of property secured by a recourse loan are taxable. The court also ruled that the taxpayer's loss due to his outstanding debt liability under the recourse loan was recognizable as a deduction. The taxpayer unsuccessfully tried to treat the whole transaction as a single tax loss.

Analysis, Extinguishment of debts, Taxation, Debt cancellation, Tax deductions, Recognition of gain or loss (Taxation), Recognized gain or loss (Taxation), Nonrecourse debt

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Maximizing after-tax returns in the world of passive losses

Article Abstract:

The 1986 Tax Reform Act's passive-loss provisions restrict the deductibility of rental-property losses. Legal methods of circumventing these provisions include paying off loans, foregoing depreciation deductions and using net-operating-loss carryback provisions. A example situation is used to illustrate the latter two methods' use.

Real property lessors, not elsewhere classified, Real estate industry, Passive activity (Taxation)

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