Blog
Rental Property – Losses Disallowed
Couple Loses Deduction After Failing to Show Hours Spent on Rental Property by Others The Tax Court held that a couple could not deduct losses incurred from their rental activity because they could not prove they met the material participation requirements with respect to that rental activity. The court rejected the husband’s argument that he spent 100 hours on the activity and thus met the requirement of Reg. Sec. 1.469-5T(a)(3) after finding that the couple did not have any documents showing the number of hours other individuals, such as the property management company that oversaw the rental of the property, spent on those activities in connection with the couple’s rental property. If you have any questions, please feel free to call.
