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Real Estate Tax Elections: Grouping, Real Estate Professional, Routine Maintenance, Section 266 Capitalization

A live 110-minute CPE webinar with interactive Q&A

This program is included with the Strafford CPE Pass. Click for more information.
This program is included with the Strafford CPE+ Pass. Click for more information.
This program is included with the Strafford All-Access Pass. Click for more information.

Friday, February 28, 2025

1:00pm-2:50pm EST, 10:00am-11:50am PST

or call 1-800-926-7926
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This webinar will provide an overview of elections that should be considered for real estate investors, rental properties, and entities holding real property. Our panel of real estate strategists will convey when tax professionals should consider each election and provide examples of their application.

Description

Many elections are available for real estate entities and rental properties. Section 1.469-4(c) allows applicable businesses to elect to be grouped for tax purposes. This election could help circumvent passive loss limitations in two ways. Electing to group activities can allow the group to pass the material participation test and absorb the passive losses from a property. It could also be used to group an active trade or business with a self-rented property, allowing passive losses from the latter to reduce the income from the former.

A Section 266 election became more valuable after TCJA, which capped the state and local tax deduction at $10,000. Section 266 allows costs for unimproved real property, including taxes, interest, and carrying charges, that would not be currently deductible, to be capitalized. This provides an opportunity for a future deduction for an expense paid that would otherwise be lost. A similar election under Section 266 is available for the construction or improvement of any real property.

A properly made election for an eligible taxpayer can reduce their tax liability significantly. Not making an available election can prove costly. Real estate advisers need to know the elections available, when they apply, and how to file these tax-saving elections properly.

Listen as our astute panel reviews real estate elections and how they are applied to reduce taxes.

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Outline

  1. Real estate elections: introduction
  2. Real estate professional
  3. Section 266 election
  4. De minimus safe harbor
  5. Routine maintenance
  6. Safe harbor for small taxpayers
  7. Grouping election
  8. Other elections
  9. Examples

Benefits

The panel will review these and other critical issues:

  • When a taxpayer should consider making an election under Section 266 to capitalize certain costs
  • What are the criteria for a real estate professional?
  • When a taxpayer could benefit from a grouping election under Section 469
  • Real estate elections that should be considered for taxpayers owning real property

Faculty

Dyer, Marcus
Marcus E. Dyer, CPA, JD
Principal, Team Leader of Tax Controversy
Withum Smith+Brown

Mr. Dyer manages and reviews all aspects of federal and state tax compliance for C-corporation, S corporation and...  |  Read More

Ramos, Jeremias
Jeremias Ramos, CPA
Senior Tax Manager
Sensiba

Mr. Ramos has more than seven years of public accounting with a focus on tax services. His expertise lies within the...  |  Read More

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