Net operating loss - rental activity
st...@fcccpas.com
I have someone who is a real estate professional
with respect to multible real estate holdings.
An aggregation election had been made in a
prior year.
Does anyone have any authority that a net operating loss
sustained in 2008 or 2009 qualifies for the five year
carryback period.
All I have found so far was a CCH article in
"Practioners' Corner" a few months ago.
Many thanks
Steve
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removep...@yahoo.com
> I have someone who is a real estate professional
> with respect to multible real estate holdings.
> An aggregation election had been made in a
> prior year.
>
> Does anyone have any authority that a net operating loss
> sustained in 2008 or 2009 qualifies for the five year
> carryback period.
>
> All I have found so far was a CCH article in
> "Practioners' Corner" a few months ago.
Does this help?
http://www.irs.gov/newsroom/article/0,,id=205329,00.html
And the actual law is at http://thomas.loc.gov/cgi-bin/query/F?c111:8:./temp/~c111bKY5rZ:e697317:
SEC. 1211. 5-YEAR CARRYBACK OF OPERATING LOSSES OF SMALL BUSINESSES.
(a) In General- Subparagraph (H) of section 172(b)(1) is amended
to read as follows:
`(H) CARRYBACK FOR 2008 NET OPERATING LOSSES OF
SMALL BUSINESSES-
`(i) IN GENERAL- If an eligible small business
elects the application of this subparagraph with respect to an
applicable 2008 net operating loss--
`(I) subparagraph (A)(i) shall be
applied by substituting any whole number elected by the taxpayer which
is more than 2 and less than 6 for `2',
`(II) subparagraph (E)(ii) shall be
applied by substituting the whole number which is one less than the
whole number substituted under subclause (I) for `2', and
`(III) subparagraph (F) shall not apply.
`(ii) APPLICABLE 2008 NET OPERATING LOSS- For
purposes of this subparagraph, the term `applicable 2008 net operating
loss' means--
`(I) the taxpayer's net operating loss
for any taxable year ending in 2008, or
`(II) if the taxpayer elects to have
this subclause apply in lieu of subclause (I), the taxpayer's net
operating loss for any taxable year beginning in 2008.
`(iii) ELECTION- Any election under this
subparagraph shall be made in such manner as may be prescribed by the
Secretary, and shall be made by the due date (including extension of
time) for filing the taxpayer's return for the taxable year of the net
operating loss. Any such election, once made, shall be irrevocable.
Any election under this subparagraph may be made only with respect to
1 taxable year.
`(iv) ELIGIBLE SMALL BUSINESS- For purposes of
this subparagraph, the term `eligible small business' has the meaning
given such term by subparagraph (F)(iii), except that in applying such
subparagraph, section 448(c) shall be applied by substituting `
$15,000,000' for `$5,000,000' each place it appears.'.
(b) Conforming Amendment- Section 172 is amended by striking
subsection (k) and by redesignating subsection (l) as subsection (k).
(c) Anti-Abuse Rules- The Secretary of Treasury or the
Secretary's designee shall prescribe such rules as are necessary to
prevent the abuse of the purposes of the amendments made by this
section, including anti-stuffing rules, anti-churning rules (including
rules relating to sale-leasebacks), and rules similar to the rules
under section 1091 of the Internal Revenue Code of 1986 relating to
losses from wash sales.
(d) Effective Date-
(1) IN GENERAL- Except as otherwise provided in this
subsection, the amendments made by this section shall apply to net
operating losses arising in taxable years ending after December 31,
2007.
(2) TRANSITIONAL RULE- In the case of a net operating loss
for a taxable year ending before the date of the enactment of this
Act--
(A) any election made under section 172(b)(3) of the
Internal Revenue Code of 1986 with respect to such loss may
(notwithstanding such section) be revoked before the applicable date,
(B) any election made under section 172(b)(1)(H) of
such Code with respect to such loss shall (notwithstanding such
section) be treated as timely made if made before the applicable date,
and
(C) any application under section 6411(a) of such
Code with respect to such loss shall be treated as timely filed if
filed before the applicable date.
For purposes of this paragraph, the term `applicable date'
means the date which is 60 days after the date of the enactment of
this Act.
LoTax
seemed to come down to whether the "landlord" who in your case is a
"real estate professional" for income tax purposes is a "proprietor"
for the eligible small business rules in the NOL section, IRC section
172. It may have been a discussion on taxalmanac.com. Sorry I can't
remember where....
LoTax