October 19, 2026

Webcast

2 CPE Credits

Don Farmer's Passive Activity Losses: Navigating Real Estate & K-1 Limitations

October 19, 2026
Webcast
2 CPE Credits

Don Farmer's Passive Activity Losses: Navigating Real Estate & K-1 Limitations

  • Instructor

    Susan
    Smith

The passive activity loss (PAL) rules under §469 remain a frequent source of error on returns that include rental real estate and partnership investments. This course takes a practical look at those rules, with a focus on real estate activities and partnership K-1 reporting. Participants will examine how material participation, real estate professional status, grouping elections, and disposition rules affect the deductibility of losses. Practical examples show how the PAL rules interact with basis, at-risk, and §461(l) excess business loss limitations, and where planning opportunities exist to release suspended losses.

Learning Objectives

1. Distinguish passive from nonpassive activities under §469

2. Apply material participation tests and real estate professional rules

3. Analyze K-1 reporting and common PAL traps

4. Determine how PAL rules interact with basis, at-risk, and excess business loss limitations

5. Identify planning opportunities to unlock suspended passive losses

Major Topics

• Passive activity loss (PAL) rules under IRC §469

• Passive versus nonpassive activity classification

• Material participation and real estate professional requirements

• Partnership K-1 reporting and common PAL pitfalls

• Coordination of PAL rules with basis, at-risk, and §461(l) limitations

• Disposition rules and strategies for utilizing suspended passive losses

CPE Credits Available

2 CPE Credits
2
Taxes

Things to Know About This Course

Course Level

  • Intermediate

Professional Area of Focus

  • Tax

Prerequisites

Working knowledge of federal individual income taxation and experience preparing or reviewing returns that include rental real estate or partnership Schedule K-1 activity.

Advanced Preparation

None

Intended Audience

CPAs and tax professionals involved in the world of tax.

Provider

Don Farmer Tax Education

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