Discussion:Reduction of Tax Attributes-Rental Property

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Discussion Forum Index --> Advanced Tax Questions --> Reduction of Tax Attributes-Rental Property


Discussion Forum Index --> Tax Questions --> Reduction of Tax Attributes-Rental Property

Sdtaxman (talk|edits) said:

19 August 2009
I have a client who received a 1099-c for a loan modification on rental property in Florida. He is not insolvent. If I understand Pub 4681 correctly, the COD can be excluded from income if we reduce the depreciable basis of the property starting in 2009. He also had a NOL on the rental of $20,000 which was allowed due to his AGI level. Should the NOL be reduced to $0 and the remainder of the COD used to reduce the basis?

Waynecpa (talk|edits) said:

19 August 2009
That is what the order is (unless there are capital loss carryovers also).

Riley2 (talk|edits) said:

19 August 2009
No. In this case, since a solvent taxpayer is making a Qualified Real Property Business Indebtedness Election, the attribute reduction rule under Sec. 108(b) does not apply at all.

Waynecpa (talk|edits) said:

19 August 2009
Yes, but this is rental property - it wouldn't be qualified would it?

Riley2 (talk|edits) said:

20 August 2009
Don't know. The Tax Court has ruled that a single rental property can rise to the level of a trade or business. Not sure if this property rises to that level.

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