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Presenting a live 110‐minute teleconference with interactive Q&A
Passive Activity Loss Rules: Strategies for Pass‐Throughs to Maximize DeductionsLeveraging Latest Federal Guidance and Rulings to Establish Material Participation
1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific
WEDNESDAY, MAY 25, 2011
Today’s faculty features:
1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific
Sarah Staudenraus Partner Pass-Throughs and Special Industries Group KPMG Washington D CSarah Staudenraus, Partner, Pass Throughs and Special Industries Group, KPMG, Washington, D.C.
Sandra Hernandez, Managing Director, WTAS, Los Angeles
Jeanne Sullivan, Director, National Pass-Throughs Group, KPMG, Washington, D.C.
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Passive Activity Loss Rules: Strategies f P Th h t M i i for Pass‐Throughs to Maximize Deductions Seminar
May 25, 2011
Jeanne Sullivan, [email protected]
Sarah Staudenraus, [email protected]
Sandra Hernandez, WTAS LLC sandra.y.hernandez@wtascom
Today’s Program
Overview Of Passive Activity Loss Rules Re: Partners[Sarah Staudenraus, Jeanne Sullivan and Sandra Hernandez]
Slide 7 – Slide 33
Exceptions And Nuances In Sect. 469[Sarah Staudenraus, Jeanne Sullivan and Sandra Hernandez]
Slide 34 – Slide 48
Reporting Requirements And The Latest Rev. Proc.[Sarah Staudenraus, Jeanne Sullivan and Sandra Hernandez]
Slide 49 – Slide 54
Sarah Staudenraus, KPMGJeanne Sullivan KPMG
OVERVIEW OF PASSIVE
Jeanne Sullivan, KPMGSandra Hernandez, WTAS LLC
OVERVIEW OF PASSIVE ACTIVITY LOSS RULES RE: PARTNERS
N iNotice
ANY TAX ADVICE IN THIS COMMUNICATION IS NOT INTENDED OR ANY TAX ADVICE IN THIS COMMUNICATION IS NOT INTENDED OR WRITTEN BY THE PRESENTERS TO BE USED, AND CANNOT BE USED, BY A CLIENT OR ANY OTHER PERSON OR ENTITY FOR THE PURPOSE OF (i) AVOIDING PENALTIES THAT MAY BE IMPOSED ON ANY TAXPAYER OR (ii) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY MATTERS ADDRESSED HEREIN.
You (and your employees, representatives, or agents) may disclose to any and all persons, without limitation, the tax treatment or tax structure, or both, of any transaction described in the associated materials we provide to you, including, but not limited to, any tax opinions, memoranda, or other tax analyses contained in those materials.
The information contained herein is of a general nature and based on authorities that are subject to change. Applicability of the information to specific situations should be determined through consultation with your tax adviser.
8
D d M i lDated Material
THE MATERIAL CONTAINED IN THESE COURSE MATERIALS IS CURRENT AS OF THE DATE PRODUCED.
THE MATERIALS HAVE NOT BEEN AND WILL NOT BE UPDATED TO INCORPORATE ANY TECHNICAL CHANGES
TO THE CONTENT OR TO REFLECT ANY MODIFICATIONS TO A TAX SERVICE OFFERED SINCE THE PRODUCTION DATE.
9
fPartner Loss Limitations: Significance
• Losses are subject to the following limitations:
― Partnership basis rules (Sect. 704(d))p ( ( ))
― At-risk rules (Sect. 465)
― Passive activity loss rules (Sect. 469)
• A taxpayer can never deduct more losses than the amount that flows through from the prior limit.g p
10
Partner Loss Limitations: Overview
I. Basis limitations under Sect. 704(d)
A. Limits a partner’s deduction of partnership losses to outside adjusted tax basisoutside adjusted tax basis
B. Does not limit the allocation of losses
II. At-risk limitations under Sect. 465
A. Limits losses from an activity to amount at-risk
B. Partnership may have more than one activity
III. Passive activity loss limitations under Sect. 469
A. Limits losses from passive activities to passive income f ll from all sources
11
Loss Limitation Ordering Rule: Example
Partner’s outside basis in partnership interest $ 50,000Partner’s at-Risk Limitation $ 35,000Partner’s share of partnership losses (passive) $ (60,000)p p (p ) ( , )Partner’s passive income (other sources) $ 25,000
• Partner can deduct $(25,000) of passive loss on return $( , ) pcalculated as follows:
Loss Suspended Allowable Allowed― § 704(d) $(60,000) $(10,000) $(50,000)§ ( ) ( ) ( ) ( )― § 465 $(50,000) $(15,000) $(35,000)― § 469 $(35,000) $(10,000) $(25,000) (25,000)
12
lPassive Activity Loss Rules: OverviewI. Sect. 469 disallows a “passive activity loss” for the year, with p y y ,
one exception:
A. Certain taxpayers may deduct up to $(25,000) passive activity loss for rental real estate activities.
II. A “passive activity loss” is the amount by which the aggregate losses from all passive activities exceed aggregate income p gg gfrom all passive activities.
A. The purpose of Sect. 469 is to prevent taxpayers from using losses from passive activities to offset salary and investment income.
B. The limitation is applied by each partner, not at the partnership level.
13
Passive Activity Loss Rules: T Of ITypes Of Income
I. Sect. 469 divides income into three categories:
1. Active - Income from activities in which the taxpayer materially participates, including activities in which wages or salaries are earned
2 P f li I i h i i l i 2. Portfolio – Investment income such as annuities, royalties, interest, dividend, capital gains/losses, guaranteed payments for interest on capital
3. Passive - Income from activities in which the taxpayer does not 3. Passive Income from activities in which the taxpayer does not materially participate
II. “Net income” from each category is subject to tax.
III. “Net loss” from passive activities is generally not currently III. Net loss from passive activities is generally not currently deductible.
A. Rental real estate allowance exception
B. Oil and gas activity exceptiong y p
C. Suspended losses deductible on fully taxable disposition
14
Passive Activity Loss Rules: Wh I N P i I ?What Is Non‐Passive Income?
I Th f ll i i i t id d iI. The following income is not considered passive:A. Portfolio (investment) incomeB. Gain or loss from investment propertyC. Income from intangibles created by taxpayerD. Personal service incomeE. Income from a covenant not to competepF. Tax refundsG. “Recharacterized” incomeH Activity of trading personal property for the accounts of H. Activity of trading personal property for the accounts of
owners of the activity
15
Passive Activity Loss Rules: S d d L CSuspended Loss Carryovers
I S t 469 ll th d d ti f l f i ti iti I. Sect. 469 allows the deduction of losses from passive activities to the extent of aggregate income from passive activities in the year.
II. The excess aggregate loss (the “passive activity loss”) is disallowed and carried forward.A. No limit on the carryforwardA. No limit on the carryforwardB. Carried forward losses are treated as incurred in the
following year.C. Suspended losses become non-passive on disposition of the p p p
activity.
16
Wh I S bj T S 6 ?Who Is Subject To Sect. 469?
I. Individuals
II. Estates and trusts
III. Closely held C corporationsy p
A. Special rules: Passive losses may offset active income but not portfolio income.
IV Personal service corporationsIV. Personal service corporations
V. Partnerships and S corporations are not subject to Sect. 469 loss limitations.
A However partners and shareholders may be subject to the A. However, partners and shareholders may be subject to the rules with respect to their distributive share of partnership income/losses.
17
Wh I A P i A i i ?What Is A Passive Activity?
I. Any trade or business in which the taxpayer does not materially participate
II. Most rental activitiesA. Special definition of “rental”B. For “real estate professionals,” a rental real estate
activity in which taxpayer does not materially participate.
18
Passive Activity Loss Rules: Wh I A R l A i i ?What Is A Rental Activity?
I R t l ti iti f S t 469 d t i l d th f ll i I. Rental activities for Sect. 469 do not include the following activities:1. Short-term rentals where the average use is 7 days or less2 R t l h th g i 30 d l d 2. Rentals where the average use is 30 days or less, and
there are significant personal services3. Rentals that involve extraordinary personal services
(rental incident to services)(rental incident to services)4. Incidental rentals5. Non-exclusive use by customer 6 Property provided to flow through entities6. Property provided to flow-through entities
19
Passive Activity Loss Rules: Wh I A A i i ?What Is An Activity?
I G ll ti it i b i d t kiI. Generally, an activity is one or more business undertakings.A. Several business undertakings that together form an
appropriate “economic unit” may constitute an activity, orB A g g t d b i d t ki g it lf tit t B. A segregated business undertaking may itself constitute an
activity.
II Determined based on all facts and circumstancesII. Determined based on all facts and circumstances
III. “Grouping” is subject to certain parameters.
20
Passive Activity Loss Rules:Why Is It Important To Define The Activity?
I L l f ti i ti d t i d f h ti itI. Level of participation determined for each activity
A. It may be easier to meet material participation standard if separate undertakings are combined.
II. Suspended loss is allowed upon the disposition of all or a substantial portion of an activity.A. May be easier to free up losses, if separate undertakings
have not been combined as one activity
III. Passive loss and credit carryovers are tracked separately for each activity.
21
Passive Activity Loss Rules:Limitations On Grouping Activities
I. Sect. 469 entities (partnerships, closely held C corp, S corp)
A. Must perform the first grouping of the entity’s activities
B Taxpayers cannot treat activities grouped together by the Sect B. Taxpayers cannot treat activities grouped together by the Sect. 469 entity as separate, but may group that activity with other activities of the taxpayer.
II Taxpayers cannot group:II. Taxpayers cannot group:
A. Rental activities with other trade or business activities (with some exceptions)
B. Real property rentals with personal property rentals (with some exceptions)
C. Activities of limited partners and limited entrepreneurs (applies p p ( ppto motion pictures, farming, leasing, oil and gas, geothermal deposits)
22
Passive Activity Loss Rules:Grouping Consistency Requirement
I. Taxpayer may not regroup activities in subsequent years, unless the original grouping was clearly inappropriate or there unless the original grouping was clearly inappropriate or there has been a material change in facts.
II. Commissioner may regroup if taxpayer’s groupings fail to reflect appropriate economic units, and primary purpose was to circumvent Sect. 469.to circumvent Sect. 469.
23
Passive Activity Loss Rules:Does Taxpayer Materially Participate?
I Th t t f t i l ti i ti f I. There are seven tests for material participation for non-limited partners.
1 T ti i t d th 500 h1. Taxpayer participated more than 500 hours2. Taxpayer participation was substantially all of the hours3. Participation was >100 hours and more than anyone else4. Taxpayer’s participation in “significant participation
activities” exceeded 500 hours5. “Nickel and dime test” (materially participated 5 of last
10 years)10 years)6. Personal service activity (any 3 years)7. Facts and circumstances test (and > 100 hours)
24
Passive Activity Loss Rules: Wh D I M T P i i ?What Does It Mean To Participate?
I R l ti d b t ti l i l tI. Regular, continuous and substantial involvement
II. Generally, any work in an activity done by an individual who i t t i th ti itowns an interest in the activity
A. Includes spouse’s participation
III. ExceptionsA. Work not customarily done by owners if principal purpose
is avoidance of Sect. 469B. Work done as an investor, unless involved in daily
operations
25
Passive Activity Loss Rules: yParticipation By Limited Partners
I. Limited partners determine material participation using three I. Limited partners determine material participation using three of the tests.
1. Taxpayer participated more than 500 hours2 “Nickel and dime test” (materially participated 5 of last 2. Nickel and dime test (materially participated 5 of last
10 years)3. Personal service activity (any 3 years)
II. If limited partner also owns a general partner interest, then limited partner is treated as a general partner.p g p
III. What about LLC members? See Garnett, 132 T.C. 368 (2009); Thompson, 87 Fed. Cl. 728 (2009); Newell, TC Memo. 2010-23
26
Passive Activity Loss Limitations: IImpact
I P i l l d d tibl i t i iI. Passive losses are only deductible against passive income.
II. If there is an aggregate passive loss, then each passive loss is i d f d i d fi it lcarried forward indefinitely.
III. $25,000 exception for active participation in rental real estate A. Phases out for income over $100,000
IV. Unused suspended losses are deductible upon a complete p p pdisposition in a taxable transaction.
27
Passive Activity Loss Rules:R h i i Of N IRecharacterization Of Net Income
I. Gains from formerly non-passive activities
II. Rental of “non-depreciable” propertyp p p y
III. Equity-financed lending activity
IV. Licensing intangible property
V I id t l t d l tV. Incidental-to-development
VI. Rentals to a related non-passive activity
VII.Significant participation activities (SPAs)g p p ( )
28
Passive Activity Loss Rules: Si ifi P i i i A i i iSignificant Participation Activities
I. Taxpayer participates more than 100 hours (but less than 500 hours) in each of several trade or business activities, and total participation in such activities exceeds 500 hours.participation in such activities exceeds 500 hours.
II. If passive gross income from all significant participation activities exceeds passive activity deductions from all such activities exceeds passive activity deductions from all such activities, a portion of the net passive income is treated as non-passive.
29
Passive Activity Loss Rules: S C f i ?State Conformity?
I. Taxpayers and preparers must consider potential non-p y p p pconformity to federal rules in any state in which they are required to file.
II. Do not assume federal = state
30
Passive Activity Loss Rules: S C f i ? (C )State Conformity? (Cont.)
I. How do states conform to IRC §469?A. General conformity to IRCy
1. No mention of passive activity losses in statutes or regulations
B. Specific conformity to IRC §469C. Conformity with exceptions to IRC §469
31
Passive Activity Loss Rules: S C f i ? (C )State Conformity? (Cont.)
I. Some states have their own version of passive activity loss rules (e.g., New Jersey and Pennsylvania).A. Classify income into various categories or “baskets” B. Losses from one category cannot offset another category
32
Passive Activity Loss Rules: S C f i ? (C )State Conformity? (Cont.)
I. Additional issues to considerA. Resident vs. non-resident
1. Most states will allow a passive activity loss of a non-resident only if they are derived from or connected with sources within the state.
B. Different filing status for state purposes1. Is the loss clearly attributable to one spouse?
33
Sarah Staudenraus, KPMGJeanne Sullivan KPMG
EXCEPTIONS AND NUANCES
Jeanne Sullivan, KPMGSandra Hernandez, WTAS LLC
EXCEPTIONS AND NUANCES IN SECT. 469
Passive Activity Loss Rules: Effect On Medicare Contribution Tax (MCT)
I. Beginning in 2013, a tax of 3.8% will apply to “net investment income” of individuals, estates and trusts (MCT).
II “Net investment income” includes:II. Net investment income includes:
Portfolio-type income
+
Income from passive activities as defined in Sect. 469
+
Income from the trade or business of trading in financial instruments or commodities
35
Passive Activity Loss Rules: yConsider The Medicare Contribution Tax
• Grouping under Sect. 469 will affect whether trade or business activities are:
• Active (and excluded from the MCT) or Active (and excluded from the MCT), or
• Passive (and included for the MCT).
• Further, net passive losses will not reduce non-passive net investment income for purposes of the MCT.
36
Passive Activity Loss Rules: “Real Estate Professional” Exception
I. If a taxpayer qualifies as a “real estate professional”:
A. Rental activities are not per se passive p p
and
A. The taxpayer can elect to group all rental activities as a single activity for purposes of qualifying as materially single activity, for purposes of qualifying as materially participating in the rental activity. The election applies for all years in which the taxpayer is a real estate professional.
37
Passive Activity Loss Rules: What Is A “Real Estate Professional”?
I. Two-pronged test (each prong having sub-tests):
1. More than half of personal services performed in trades or p pbusinesses are performed in real property trades or businesses in which the taxpayer materially participates,
and
2. Such taxpayer performs more than 750 hours of services in real property trades or businesses in which the taxpayer materially participates.
38
Passive Activity Loss Rules:l dReal Property Trades Or Businesses
I Real property trade or business: Any real property I. Real property trade or business: Any real property development, redevelopment, construction, reconstruction, acquisition, conversion, rental, operation, management, leasing or brokerage trade or businessleasing or brokerage trade or business
A. What is a rental? Treas. Reg. Sect. 1.469-1T(e)(3)(ii)
B Closely held C corp is in a real property trade or business B. Closely held C corp is in a real property trade or business if more than 50% of gross receipts are derived from real property trades or businesses in which the corporation materially participatesmaterially participates.
C. Services performed by an employee are not performed in real property trades or businesses unless performed by a 5% owner in the employer.
39
Passive Activity Loss Rules:“R l E P f i l”“Real Estate Professional”
I. Recent cases on real estate professionals: Todd D. Bailey Jr., et ux. v. Commissioner, T.C. Summ. Op. 2011-22); Bosque v. Commissioner, T.C. Memo 2011-79
A. The taxpayer (without counting spouse’s hours) must materially participate in real estate trades or businesses for the required number of hours.
B. If the real estate trade or business is rental, it must qualify as a rental activity (real estate rented for more than 7 days on average), and the taxpayer must establish material participation in the rental activity.
C. An activity of leasing real estate for 7 days or less on average is not treated as a real estate trade or business, for this purpose., p p
40
Passive Activity Loss Rules:S lf Ch d I R lSelf‐Charged Interest Rules
I. If a taxpayer lends money to a partnership or S corp in which the taxpayer owns an interest, or vice versa, the taxpayer will have interest income and expense related to the loan. If the proceeds of the loan are used in a passive activity, there could be a mismatch b t th i d d ti t d d th tf li i t t between the passive deductions generated and the portfolio interest income from the loan. These are “self-charged” interest deductions that the regulations intend to allow to offset. The regulations also apply to guaranteed payments for the use of capital under Sect apply to guaranteed payments for the use of capital under Sect. 707(c).
II. The regulations recharacterize the “applicable percentage” of the i t t i d/ th i t t i i f i interest income and/or the interest expense as arising from a passive activity.
A. See Treas. Reg. Sect. 1.469-7 for calculations and examples
41
Self‐Charged Interest Rules:E lExample
A Loan
PRS
A Loan
$5,000 Interest Income
$2,500 Interest Expense
I. A lends money to a partnership (PRS) in which A owns a 50% interest.
PRS
I. A lends money to a partnership (PRS) in which A owns a 50% interest.
II. PRS pays A $5,000 interest and allocates $2,500 to A as an interest expense deduction allocable to a passive activity in Year 1.
III A’ li bl f h i i i 50% d $2 500 III. A’s applicable percentage of the interest income is 50%, and $2,500 of A’s interest income is recharacterized as income from a passive activity.
IV. The balance of the interest income is portfolio income.
42
Passive Activity Loss Rules: F P i A i i iFormer Passive Activities
I Losses from former passive activities may offset only income I. Losses from former passive activities may offset only income from the (now active) activity. The remaining suspended loss is allowed if the taxpayer disposes of the activity in a fully taxable transaction to an unrelated persontaxable transaction to an unrelated person.
A. According to the House Committee Report, Revenue Reconciliation Act of 1993, if a taxpayer has a suspended passive loss (e.g. from rental activities) and qualifies as a real estate professional, then the suspended loss is treated as a loss from a former passive activity.p y
B. Other situations include:
1. Contribution of the passive activity to a corporation
2. Closely held C corp no longer subject to Sect. 469
43
Passive Activity Loss Rules:O h S i l R lOther Special Rules
I Cl l h ld C tiI. Closely-held C corporations
A. Passive activity deductions can offset net active income.
B Any excess passive activity loss is suspended at the C corp B. Any excess passive activity loss is suspended at the C corp level.
C. Material participation: One or more shareholders holding more than 50% by value of stock must materially participate in the corporation’s activity.
1 See also Sect 465(c)(7)(C) for non-personal service 1. See also Sect. 465(c)(7)(C) for non personal service corporations
44
Passive Activity Loss Rules:O h S i l R l (C )Other Special Rules (Cont.)
I Oil d i t tI. Oil and gas interestsA. A working interest in an oil and gas property, which the
taxpayer holds directly or through an entity that does not limit liability, is not a passive activity.limit liability, is not a passive activity.
II. Publicly traded partnerships (PTPs)A Passive loss rules apply separately to each interest in a A. Passive loss rules apply separately to each interest in a
PTP (e.g., PTP losses can only offset income from such PTP).
B. A complete disposition is a disposition of the entire p p pinterest in partnership.
45
Passive Activity Loss Rules: yDisposition Of Passive Activity By Sale Or Exchange
Type Of Disposition General TreatmentType Of Disposition General Treatment
Fully taxable disposition with an unrelated party
Suspended losses are deductible.
Fully taxable disposition with a Losses remain suspended until the activity isFully taxable disposition with a related party
Losses remain suspended until the activity is acquired by an unrelated party.
Disposition in a non‐recognition transaction
In general, suspended losses attach to the replacement activity.transaction replacement activity.
Installment sale Suspended losses recognized in same ratio as gain is recognized
Partial disposition fully taxable Generally losses remain suspended IfPartial disposition, fully taxable,unrelated party
Generally losses remain suspended. If disposition is “substantially all” of activity, a portion of losses may be deductible.
Death of taxpayer Suspended losses in excess of the basis step‐
46
p y p pup, if any, are deductible in the final year.
Passive Activity Loss Rules: yDisposition Of Passive Activity By Sale Or Exchange (Cont.)
Type Of Disposition General TreatmentType Of Disposition General Treatment
Gift Suspended losses are eliminated for the donor, but added to the basis donee takes in property.
Divorce Suspended losses are eliminated for the forfeitingDivorce Suspended losses are eliminated for the forfeiting spouse, but are added to the basis recipient spouse takes in property.
Distribution by trust or estate Suspended losses not deductible by estate/trust.Distribution by trust or estate Suspended losses not deductible by estate/trust.Basis of activity is increased by suspended losses immediately before distribution.
47
Passive Activity Loss Rules: S C f i NState Conformity Nuances
I. In California, IRC §469(c)(7) does not apply (CTRC §17561).A. The election to aggregate rental real estate holdings is not
il blavailable.B. All rental activities are treated as passive.
II. Passive activity loss limitations can affect state modifications.A. In Maine, depreciation adjustments are limited in the
same ratio limited for federal
48
Sarah Staudenraus, KPMGJeanne Sullivan, KPMG
REPORTING REQUIREMENTS
JSandra Hernandez, WTAS LLC
QAND THE LATEST REV. PROC.
Passive Activity Loss Grouping:Rev. Proc. 2010‐13 Grouping Disclosures
I I di id l F b i i f J 25 2010 R I. Individuals: For tax years beginning on or after Jan. 25, 2010, Rev. Proc. 2010-13 requires written annual return disclosures:1. In the first year in which two or more passive activities are
grouped as a single activityg p g y2. In a year in which a passive activity is added to the grouping3. In a year in which the taxpayer determines that the original
grouping was clearly inappropriate or there has been a material h i th f t d i t th t k th i i l change in the facts and circumstances that makes the original
grouping clearly inappropriate.
II However a partner or S corporation shareholder need not make any II. However, a partner or S corporation shareholder need not make any additional disclosures unless the partner/shareholder groups the Sect. 469 entity’s activities that were not grouped by the entity, or groups an activity of the Sect. 469 entity with other activities conducted directly (or indirectly through other Sect. 469 entities).conducted directly (or indirectly through other Sect. 469 entities).
50
Passive Activity Loss Grouping:Rev. Proc. 2010‐13 Grouping Disclosures (Cont.)
I S 469 i i A l i i i di l I. Sect. 469 entities: Annual activity grouping disclosures required in accordance with the instructions for forms 1065 and 1120(S)
II. Forms require separate activity reporting: 17 items required for each activity
III. Does reporting net income/loss on Schedule K, Line 1 amount to a “grouping” or not?
51
Passive Activity Loss Grouping:R P G i (C )Rev. Proc. 2010‐13 Grouping (Cont.)
I G df h l f i di id l i i h I. Grandfather rule for individual taxpayer groupings prior to the effective date of Rev. Proc. 2010-13 need not be disclosed unless the individual taxpayer: A Adds a new passive activity to the group A. Adds a new passive activity to the group, B. Determines that the original grouping was clearly
inappropriate, or C Determines there has been a material change to the facts C. Determines there has been a material change to the facts
and circumstances that makes the original grouping clearly inappropriate.
II. Grandfather rule does not appear to be applicable to partnership disclosures.
52
Passive Activity Loss Grouping:R P G i (C )Rev. Proc. 2010‐13 Grouping (Cont.)
I. If a taxpayer fails to disclose a grouping that is required to be disclosed under Rev. Proc. 2010-13, then each trade or business will be treated as a separate activity (unless the IRS regroups under anti-avoidance rule of Treas. Reg. Sect. 1.469-4(f)).( )).A. Does this rule also apply to partnerships?
53
Passive Activity Loss Rules: S R iState Reporting
I. In California, as IRC §469(c)(7) does not apply, rental real estate holdings can not be aggregated and must be separately tracked.tracked.
II. Taxpayer aggregating multi-state propertiesA Issues upon dispositionA. Issues upon disposition
III. State ramifications are not always identical to federal.
54
