Cfp Review Income Tax

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DPP

Back 1

CONDUIT ENTITY.

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SUBSTANTIAL ECONOMIC EFFECT

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ALLOCATIONS MUST INCREASE/DECREASE PARTNERS SHARE EQUALLY

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AT-RISK RULES

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PROHIBIT TAXPAYERS FROM DEDUCTING LOSSES IN EXCESS OF THEIR AMOUNTS AT RISK. INCLUDES CASH,A/B,SHARE OF RECOURSE DEBT, AND, IN REAL ESTATE ONLY, NONRECOURSE DEBT

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PASSIVE ACTIVITY

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ACTIVITIES THAT INVOLVE THE CONDOCUT OF A TRADE OR BUSINESS IN WHICH THE TAXPAYER DOES NOT MATERIALLY PARTICIPATE. INCLUDES ANY RENTAL ACTIVITY EXCEPT HOTEL, SHORT TERM RENTAL BUSINESS,

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MATERIAL PARTICIPATION

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500 HOURS ANNUALLY

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ACTIVE PARTICIPATION

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LOWER STANDARD OF MATERIAL PARTICIPATION. MAKES MAJOR DECISIONS. OWNERSHIP OF 10% OR LESS DOESNT QUALIFY. DEDUCTION PHASES OUT BETWEEN $100-$150K

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HISTORIC REHABILITATION

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25,000 DEDUCTION-EQUIVALENT TAX CREDIT. PHASED OUT BETWEEN 200,000 AND 250,000

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LOW INCOME HOUSING

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25,000 DEDUCTION EQUIVALENT CREDIT. NO AGI LIMIT. CAN OFFSET AMT LIABILITY. MAXIMUM BENEFIT FOR ACTIVE PARTICIPATION, LOW INCOME HOUSING AND HISTORIC REHABILITATION IS 25,000 COMBINED

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OIL AND GAS WORKING INTEREST

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THE INTEREST MUST BE HELD IN A WAY THAT DOES NOT LIMIT TAXPAYERS LIABILITY. LOSSES ARE NOT PASSIVE AND FULLY DEDUCTIBLE WITHOUT REAGARD TO LEVEL OF PARTICIPATION OF AGI.

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VACATION HOME RULES

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DEDUCTION IS LIMITED TO INCOME FROM RENT

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RESIDENCE TEST

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PERSONAL USE EXCEEDS 14 DAYS OF 10% OF NUMBER OF DAYS RENTED. INCOME IS NOT PASSIVE.

PROPERTY RENTED FOR LESS THAN 15 DAYS,INCOME IS EXCLUDED, BUT NO EXPENSES ARE DEDUCTIBLE