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To mike and sjr,
Since you might be lurking...
do you know if at-risk and basis for each passive investment are required for a RE professional who has elected to group passive activities?
The taxpayer and spouse qualify to make the election.
I took over a client and have more facts but I'll just say that the prior CPA did not prepare basis schedule or at-risk forms. The client does not want to ask the prior CPA. I don't want to prepare these forms if not required.
Once two activities have been grouped into one larger activity, taxpayers only need to show material participation in the activity as a whole. Whereas, if the two activities are treated as separate activities, taxpayers must show material participation in each one. | |
| (2) | If activities are grouped together for tax purposes, taxpayers will be in a better position to use up any suspended passive losses because taxpayers have disposed of their entire interest in that activity. |
| (3) | Grouping can also be important in determining whether a taxpayer satisfies the 10 percent ownership requirement for actively participating in a rental real estate activity. |
