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total rental real estate (passive activity) losses of $62,903.4
Petitioner reported no other income from passive activities.
Petitioner's passive activity loss for the year 1992 is therefore
$62,903. For the years 1993 and 1994, petitioner's returns
reveal on Schedules E respective passive activity losses from
individually and partnership owned residential rental property
totaling $35,456 and $82,230.
Because respondent determined that petitioner actively
participated in the listed rental activities, the section 469(a)
disallowance of a passive loss deduction will not apply to
$25,000 of petitioner's passive losses for each of the years
1992, 1993, and 1994. The remainder of petitioners' passive
activity losses from each respective year that is disallowed as a
deduction may be carried over to the next taxable year for
application against income from passive activities, if any, and
the $25,000 offset. Sec. 469(b); sec. 1.469-1(f)(4), Income Tax
Regs.
For petitioner's 1994 tax year, the provisions of subsection
(c)(7) of section 469 are effective. The "Special rules for
taxpayers in real property business" contained in subsection
4For purposes of sec. 469, petitioner must aggregate his
individual and partnership real estate rental income and losses
as passive activity income and losses. Sec. 1.702-
1(a)(8)(ii),(iii) and (b), Income Tax Regs.; see also sec. 1.469-
2T(d)(6)(v)(B), Temporary Income Tax Regs., 53 Fed. Reg. 5717
(Feb. 25, 1988).
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