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Unformatted text preview: o PRIMARILY PERSONAL USE No rental income is included in gross income No deduction is allowed for expenses unless normally itemized o MIXED USE No net loss allowed o Allocation of Rental Expenses IRS method: allocate based on ratio of number of rental days to total days used Tax Court Method: taxes and interest allocated based on ratio of rental days to 365 FLOW-THROUGH ENTITIES o Not taxed directly o Income flows through to partners, owners, etc o Passive income o Reported on informational returns o Partnership income or loss passive activities Active (work) Passive (investments) Portfolio (rental or flow through) Can deduct passive losses to the extent of passive income (no net loss allowed) Excess losses cannot offset active or portfolio, but carry forward to future years...
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This note was uploaded on 03/30/2012 for the course ACCT 3221 taught by Professor Armentor during the Spring '08 term at LSU.
- Spring '08