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You are here: Home / Aircraft Income Tax / Passive Activity & Hobby Loss

IRS PASSIVE ACTIVITY RULES: PROVING THE TIME DEDICATED IN YOUR BUSINESS

All tax practitioners are aware how unyielding the tax code can be to those who lack sufficient planning and learn of the law’s arcane requirements only after the fact. One recent tax court case re-affirming this lesson is Williams v. Commissioner, TC Memo 2014-158 (August 2014), where a taxpayer lost out on deductions from his aircraft business due to his failure to provide the court with sufficient proof of his day-to-day work.

 

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Filed Under: Aircraft Income Tax, Front Page, Passive Activity & Hobby Loss Tagged With: economic profit expectation, grouping activities, grouping election, pass, passive activity

KEY TAX EXPOSURE AREA: PASSIVE ACTIVITY PROTECT YOURSELF WITH PROPERLY FILED ELECTIONS

A notable milestone in the cat-and-mouse game of individuals seeking to minimize tax burden and Congress making new laws to end potential shelter activity is the Passive Activity Rule, which was originally enacted as part of the Tax Reform Act of 1986, and which recent developments have brought prominently to the minds of tax advisors.  In particular, an important one-time opportunity to avoid being trapped under this rule arises from new IRS regulations issued in November 2013 due to the new net-investment income tax passed as part of the 2010 Patient Protection and Affordable Care Act (a/k/a “Obamacare”). 

 » Read more about: KEY TAX EXPOSURE AREA: PASSIVE ACTIVITY PROTECT YOURSELF WITH PROPERLY FILED ELECTIONS  »

Filed Under: Aircraft Income Tax, Front Page, Passive Activity & Hobby Loss Tagged With: aircraft tax, economic profit expectation, grouping activities, grouping election, ordinary and necessary, passive activity

IRS RELEASES IMPORTANT NEW GROUPING RULES FOR AIRCRAFT OPERATORS

Revenue Procedure 2010-13 Effective for Years Beginning After January 25, 2010

There are a number of good business reasons to isolate aircraft ownership and operation in stand alone entities.  The benefits often include liability protection, confidentiality, sales and use tax control, and transferability of business interest.  Current federal income tax benefits are rarely enhanced by using a stand alone structure; in fact, without proper planning federal tax benefits can be suspended or lost entirely based on the structure chosen. 

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Filed Under: Aircraft Income Tax, Passive Activity & Hobby Loss Tagged With: grouping activities, hobby loss rules, passive activity, reasonable and necessary

IRS PROPOSES NEW PASSIVE ACTIVITY GROUPING RULES GROUPING OF YOUR AIRCRAFT INTO YOUR PRIMARY BUSINESS

Aircraft Income Tax, Passive Activity & Hobby Loss

Filed Under: Aircraft Income Tax, Passive Activity & Hobby Loss Tagged With: grouping activities, grouping election, hobby loss, notice 2008-64, ordinary and necessary, passive activity

HOW TO QUALIFY YOUR FLIGHT SCHOOL AIRCRAFT AS AN ACTIVE TRADE OR BUSINESS

Aircraft Income Tax, Passive Activity & Hobby Loss

Filed Under: Aircraft Income Tax, Passive Activity & Hobby Loss Tagged With: economic profit expectation, flight school, grouping election, hobby loss, leaseback, passive activity

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Advocate Consulting Legal Group, PLLC. 3555 Kraft Rd. Suite 240 Naples, FL 34105 and 1300 N. Westshore Blvd. Suite 220 Tampa, FL 33607. Suzanne Meiners-Levy, Esq. (239) 213-0066. Tax Disclosure. We inform you that any U.S. federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under federal tax laws, specifically including the Internal Revenue Code, or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. Privacy Policy. Terms of Use.