PIGS & PALS - Deciphering the Passive Loss Rules [PLR Fbx]

Aug 22, 2013
Time: 8-4

Subject:

Tax

Credit Hours:

8.00

Price:

Member: $295.00
Non-member: $445.00

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Discussion Leader:

John Connors, JD, CPA, LLM    more info

Prof. John J. Connors, J.D., C.P.A., LL.M.
As an accounting graduate of La Salle University in Philadelphia, Prof. Connors went on for his law degree at the
University of Notre Dame, graduating in 1980. After serving as an instructor in the School of Business
Administration, he obtained his Masters of Law in Taxation at the University of Miami Law School in Coral Gables,
Florida. He then served on the graduate tax faculty at the University of Wisconsin’s School of Business in
Milwaukee, WI.
His professional background includes experience in income and estate tax planning, as well as individual,
partnership and corporate tax return preparation and research as a senior tax consultant for Price Waterhouse in
the Philadelphia and South Bend offices. Prof. Connors also worked on expatriate and corporate tax matters as
an international tax consultant for the Chrysler Corporation in London, England.
Prof. Connors currently conducts a national consulting practice designed especially for tax professionals based
out of Milwaukee, WI. He also publishes a tax newsletter devoted exclusively to practitioners entitled the Monthly
Tax Update. He has been the outside editor for CCH’s Federal Tax Course, and has spoken at numerous tax
institutes, workshops and conferences around the country. And, his “Complete Guide to Depreciation, Amortization
& Transfers of Property - Issues, Strategies & Answers” is sold to tax practitioners throughout the U.S., along with
a brand new publication entitled “LLCs Taxed as Partnerships.”
As a nationally known speaker on a variety of tax topics, Prof. Connors has consistently earned average overall
ratings in excess of 4.7 (i.e., on a 5.0 scale) for his knowledge and presentation skills, as well as the quality of his
materials. In 2013, he was selected to receive the Sid Kess Award for Excellence in Continuing Education by the
American Institute of CPAs. And, on any item that he has presented in his materials, he is available for follow-up
questions, a factor much-appreciated by those practitioners attending his seminars.

Prof. John J. Connors, J.D., C.P.A., LL.M.As an accounting graduate of La Salle University in Philadelphia, Prof. Connors went on for his law degree at theUniversity of Notre Dame, graduating in 1980. After serving as an instructor in the School of BusinessAdministration, he obtained his Masters of Law in Taxation at the University of Miami Law School in Coral Gables,Florida. He then served on the graduate tax faculty at the University of Wisconsin’s School of Business inMilwaukee, WI.His professional background includes experience in income and estate tax planning, as well as individual,partnership and corporate tax return preparation and research as a senior tax consultant for Price Waterhouse inthe Philadelphia and South Bend offices. Prof. Connors also worked on expatriate and corporate tax matters asan international tax consultant for the Chrysler Corporation in London, England.Prof. Connors currently conducts a national consulting practice designed especially for tax professionals basedout of Milwaukee, WI. He also publishes a tax newsletter devoted exclusively to practitioners entitled the MonthlyTax Update. He has been the outside editor for CCH’s Federal Tax Course, and has spoken at numerous taxinstitutes, workshops and conferences around the country. And, his “Complete Guide to Depreciation, Amortization& Transfers of Property - Issues, Strategies & Answers” is sold to tax practitioners throughout the U.S., along witha brand new publication entitled “LLCs Taxed as Partnerships.”As a nationally known speaker on a variety of tax topics, Prof. Connors has consistently earned average overallratings in excess of 4.7 (i.e., on a 5.0 scale) for his knowledge and presentation skills, as well as the quality of hismaterials. In 2013, he was selected to receive the Sid Kess Award for Excellence in Continuing Education by theAmerican Institute of CPAs. And, on any item that he has presented in his materials, he is available for follow-upquestions, a factor much-appreciated by those practitioners attending his seminars.

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Website registration for this course closes on August 21, 2013. To register after this date please contact the society at akcpa@ak.net or 907-562-4334.

Full Description

PIGS & PALS - Deciphering the Passive Loss Rules

Date: August 22, 2013

Location: Westmark Fairbanks Hotel
813 Noble Street
Fairbanks, Alaska

The passive loss rules encompass an extremely complex area of the tax law. Especially in light of the new 3.8% Medicare surtax, it is important to have a grasp of the planning issues, as well as the traps that exist for the unwary client.
This workshop will provide a comprehensive overview of all of the PAL rules, while providing numerous planning suggestions for your clients. A special emphasis will be placed on the following key issues:
- How do the self-rental rules work when a building is leased to both the taxpayers business, as well as other third parties? How are outside investor/owners of the leased building affected?
- Understanding the PAL recharacterization rules:
Rentals of nondepreciable properties (e.g., farming and parking lots)
Rentals incidental to development activities (e.g., rental those condos until they sell)
Rentals to businesses in which you materially participate
Sales of substantially appreciated rental properties
- When can recharacterized income be used on Form 4952 to offset investment interest expense?
- Do the PAL rules apply to businesses sub-letting excess space?
- Case studies and illustrations on when (and, when not) to make a PAL grouping election
When can rental activities be grouped with trade or business activities?
Identical ownership and insubstantiality tests
Actual mechanics of making election; what statements need be attached to return?
Being locked into grouping election with future purchases of rental properties
When can late grouping elections be made?
What if there is a material change in facts and circumstances?
- What happens to suspended losses for a former passive activity? (e.g., vacation/rental homes
converted to principal residences; grouping of former passive rental activities)
- Impact of grouping election for rental properties on new 3.8% Medicare surtax
Can real estate professionals avoid the surtax (or, do they want to when they have significant passive losses from other activities or investments?)
What about the loss of this potential passive income source?
Strict recordkeeping needed for proof of material participation
- Do the other PAL exceptions allow the taxpayer to avoid the new 3.8% Medicare surtax?
Rentals involving 7 days or less on average
Recharacterized rental income (e.g., self-rentals, rentals of nondepreciable property,
rentals incidental to development activities)
- Special IRS audit program results in almost unanimous losses for taxpayers on PAL issues
Are we advising clients properly in the first place on these PAL issues?
- Gains from properties never rented allowed to offset passive losses (how is this possible?)

Designed For: CPAs

Level of Knowledge: Advanced

CPE Credits: 8

Prerequisite: None

Acronym: PLR

Discussion Leader: Professor John Connors
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