Self-Rental Rule via CCIM Institute

Don’t get caught in a trap of unintended consequences.

The only thing worse than incurring a loss on investment property is incurring a loss that cannot be deducted for tax purposes. Self-rental property may cause this tax result for some property owners if rental arrangements are not strategically prepared. The following overview of the self-rental rule, including an explanation of passive activities in the context of rental real estate, may shed light for property owners who want to avoid such tax consequences.

Passive Activities Concept
The Internal Revenue Service considers most business activities to be nonpassive if a taxpayer materially participates in the business. One exception to this rule is rental real estate.

Read more...Self-Rental Rule via CCIM Institute