- 11 -
T.C. Memo. 1993-578. Nevertheless, the regulations do not allow
a post-event “ballpark guesstimate”. Id.
The general rule is that each interest of the taxpayer in
rental real estate is treated as a separate activity. Sec.
469(c)(7)(A)(ii). However, a taxpayer in the real property
business may elect to treat all interests in rental real estate
as one activity. Sec. 469(c)(7)(A). The election to treat all
interests in rental real estate as a single rental real estate
activity is made:
by filing a statement with the taxpayer’s original income
tax return for the taxable year. This statement must
contain a declaration that the taxpayer is a qualifying
taxpayer for the taxable year and is making the election
pursuant to section 469(c)(7)(A). * * *
Sec. 1.469-9(g)(3), Income Tax Regs. Such an election is binding
for the taxable year in which it is made and for all future years
in which the taxpayer qualifies as a real estate professional,
even if there are intervening years in which the taxpayer is not
a qualifying taxpayer. Sec. 1.469-9(g)(1), Income Tax Regs. The
election may be made in any year in which the taxpayer is a
qualifying taxpayer, and the failure to make the election in one
year does not preclude the taxpayer from making the election in a
subsequent year. Id.
On this record, the Court holds that petitioners did not
file a valid election to treat their rental properties as one
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Next
Last modified: May 25, 2011