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activities of a taxpayer in the real property business (real
estate professional) if:
(i) more than one-half of the personal services
performed in trades or businesses by the taxpayer
during such taxable year are performed in real property
trades or businesses in which the taxpayer materially
participates, and
(ii) such taxpayer performs more than 750 hours of
services during the taxable year in real property
trades or businesses in which the taxpayer materially
participates.
Sec. 469(c)(7)(B).
This exception applies as if each interest of the taxpayer
in rental real estate were a separate activity unless the
taxpayer elects to treat all interests in rental real estate as a
single rental real estate activity. Sec. 469(c)(7)(A); see sec.
1.469-9(g)(1), Income Tax Regs. To make such an election, the
taxpayer must file a statement with the taxpayer’s original
income tax return for the taxable year declaring that he or she
is a qualified 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 is a qualifying taxpayer 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
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Last modified: May 25, 2011