Section 469(c)(7) Procedure, Practice, and Regulatory Implications
Wednesday, March 21, 2018
My October 2016 Journal of Taxation paper, "Section 469's Activity and Participation Conclusive Presumptions," makes clear the Tax Court's March 2014 Aragona Trust decision distilled previously confused rental real property trade or business activity and material participation distinctions. This paper concludes Aragona Trust is procedurally retroactive, outlines transition practices, and calls for regulatory changes.
Aragona Trust is Procedurally Retroactive
Pragmatic Transitioning Practices
The Call for Regulatory Change
**Please Note: If you need credit reported to the IRS for this IRS approved program, please download the IRS CE request form on the Course Materials Tab and submit to firstname.lastname@example.org.
*Recognize the Tax Court’s March 2014 Aragona Trust decision should be correctly accorded retroactive treatment
*Recognize transition practices correctly involve amending all open-year returns that had reported Section 469(c)(7) rental real property trade or business activities inconsistent with Aragona Trust
*Recognize the Secretary of the Treasury has a duty, and the reasons therefor, to correctly revise Section 469 and 1402 regulations to be consistent with Aragona Trust’s tenets
*Section 469(c)(7) rental real estate trade or business activity and material participation conclusive presumptions
*Procedural retroactivity of court decisions and application to the Tax Court’s March 2014 Aragona Trust decision
*Transitioning from pre-Aragona Trust decision real estate professional practices to Section 469(c)(7) rental real estate trade or business activity and material participation conclusive presumption practices
*Call for Section 469 and 1402 regulatory changes