Tax Court Rules Landlord Not Real Estate Professional, Rejects Losses

For over 50 years, Bloomberg Tax’s renowned flagship daily news service, Daily Tax Report® has helped leading practitioners and policymakers stay on the cutting edge of taxation and...

The U.S. Tax Court held July 16 that a taxpayer's claimed losses from seven out-of-state rental properties were subject to the passive activity limitation under tax code Section 469, because the taxpayer could not prove he was a real estate professional (Merino v. Commissioner, T.C. Memo 2013-167 (7/16/13)).
Judge Robert A. Wherry Jr. found that the taxpayer, Guillermo Merino Jr., was not a real estate professional because Merino failed to prove that he spent at least 750 hours during the 2007 tax year performing services in real property trades or businesses, and that these services accounted for more than half the time he spent performing services in any trade or business.

For full access to this article, please register for a free trial to Daily Tax Report® .  

Request Daily Tax Report