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Tax Planning for Real Estate Professionals: Passive Activity Rules, Material Participation Tests, NIIT, Aggregation

Recording of a 90-minute premium CLE/CPE video webinar with Q&A

This program is included with the Strafford CLE Pass. Click for more information.
This program is included with the Strafford CPE+ Pass. Click for more information.
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Conducted on Thursday, January 11, 2024

Recorded event now available

or call 1-800-926-7926

This CLE/CPE course will provide attendees with an in-depth analysis of essential tax planning techniques and challenges for real estate professionals. The panel will discuss the criteria to be a real estate professional for tax purposes, passive activity rules, material participation tests, aggregating rental properties, grouping strategies, and other key tax planning considerations.


Real estate professionals can lower their tax burden by understanding applicable tax laws and implementing effective tax planning strategies. Tax professionals must recognize the compliance and reporting challenges and navigate complex federal and state tax rules applicable to real estate professionals.

Qualifying as a real estate professional and meeting the material participation guidelines can allow taxpayers to avoid rental income or loss classification as passive. Passive losses are often suspended, waiting for either offsetting passive income or the disposition of the property itself. Passive income can be troublesome, subjecting certain taxpayers to the additional 3.8 percent net investment income tax (NIIT). By treating losses as non-passive, taxpayers can utilize the losses to offset other sources of income and avoid NIIT.

Taxpayers often have several rental activities. Each rental activity must meet the material participation rules for real estate professionals unless an election is made under Reg. Sect. 1.469-9(g), allowing real estate activities to be aggregated. The election, however, is binding until specific requirements are met and the election is revoked.

In addition, real estate professionals have access to various other opportunities, such as the application of business depreciation for certain capital assets, the ability to elect out of the interest deduction limitation, capital gains deferral by investing in qualified opportunity zones, and other vital items.

Listen as our panel of real estate taxation experts discusses how real estate professionals meet the material participation tests, passive activity rules, aggregating rental properties, grouping strategies, and other key tax planning considerations.



  1. Real estate professional status
  2. Material participation test
  3. Trade or business income
  4. Aggregation
  5. Other tax planning considerations


The panel will review these and other critical issues:

  • What constitutes a real estate trade or business?
  • Aggregating real estate activities
  • Meeting the material participation test
  • When is rental real estate subject to NIIT?
  • When does real estate qualify for the 199A deduction?


Lovett, Brian
Brian T. Lovett, CPA, JD

Withum Smith+Brown

Mr. Lovett has extensive experience serving the tax needs of both public companies and closely-held businesses,...  |  Read More

Palovick, Sara
Sara A. Palovick, CPA

Tax Partner
Withum Smith+Brown

Ms. Palovick specializates in real estate, and focuses most of her time in the areas of partnership and individual...  |  Read More

Access Anytime, Anywhere

Strafford will process CLE credit for one person on each recording. CPE credit is not available on recordings. All formats include course handouts.

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