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Petitioner had passive losses from six of the properties
before 1994. As of January 1, 1994, he had suspended losses
(i.e., losses which he could not deduct) totaling $215,860 from
his seven properties.
C. Proposed Regulation
On January 10, 1995, the Secretary proposed a regulation
which stated that a taxpayer may make an election under section
469(c)(7) by filing a statement with the taxpayer’s original
return in which the taxpayer declares that he or she is a
qualifying taxpayer for the taxable year, and that the election
is under section 469(c)(7)(A). See sec. 1.469-9, Proposed Income
Tax Regs., 60 Fed. Reg. 2557 (Jan. 10, 1995).1
1 Sec. 1.469-9, Proposed Income Tax Regs., 60 Fed. Reg.
2561 (Jan. 10, 1995), provides in pertinent part as follows:
(g) Election to treat all interests in rental
real estate as a single rental real estate activity–-
(1) In general. A qualifying taxpayer may make an
election to treat all of the taxpayer’s interests in
rental real estate as a single rental real estate
activity. This election is binding for the taxable
year in which it is made and for all future years in
which the taxpayer is a qualifying taxpayer. However,
if there is a material change in a taxpayer’s facts and
circumstances, the taxpayer may revoke the election
using the procedure described in paragraph (g)(3) of
this section.
* * * * * * * * *
(3) Filing a statement to make or revoke the
election. A qualifying taxpayer makes the election to
treat all interests in rental real estate as a single
rental real estate activity by filing a statement with
(continued...)
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