- 7 - average period of customer use is 7 days or less. Scheiner v. Commissioner, supra. Section 469(i)(1) and (2) provides: (i) $25,000 Offset for Rental Real Estate Activities.-- (1) In general.--In the case of any natural person, subsection (a) shall not apply to that portion of the passive activity loss * * * which is attributable to all rental real estate activities with respect to which such individual actively participated in such taxable year * * *. (2) Dollar limitation.--The aggregate amount to which paragraph (1) applies for any taxable year shall not exceed $25,000. In effect, section 469(i) allows the taxpayer to offset from nonpassive income up to $25,000 of certain passive activity losses.4 With respect to the limited applicability of the $25,000 offset to losses attributable to "rental real estate activities", the legislative history of section 469 explains: Since relief under this rule applies only to rental real estate activities, it does not apply to passive real estate activities that are not treated as rental activities under the provision (e.g., an interest in the activity of operating a hotel). * * * [S. Rept. 99-313 (1986), 1986-3 C.B. (Vol. 3) 1, 737.] Congress, therefore, intended that taxpayers should be entitled to the $25,000 offset for losses attributable to "rental real 4 The $25,000 offset allowable under sec. 469(i) is phased out as adjusted gross income, modified by sec. 469(i)(3)(E), exceeds $100,000, with a full phase-out occurring when modified adjusted gross income equals $150,000. Sec. 469(i)(3)(A).Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 Next
Last modified: May 25, 2011