Avoiding Accidental Partnerships in Real Estate

**Correction** : Hey everyone! I misspoke in this episode. The guidance on rev proc 84-35 references the old consolidated audit procedures that impact older returns. The CPAR (Consolidated Partnership Audit Regime) that impacts current returns does NOT impact the ability to use Rev proc 84-35 for late relief.

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Electing out of CPAR: https://www.irs.gov/businesses/partnerships/elect-out-of-the-centralized-partnership-audit-regime

Small Partnership Late Filing Relief Rev Proc 84-35 : https://www.taxnotes.com/research/federal/irs-private-rulings/legal-memorandums/small-partnerships-are-not-automatically-exempt-from-filing-returns/1w8vn

Rev Proc Spousal LLC Filing as a QJV instead of a 1065: https://www.irs.gov/pub/irs-drop/rp-02-69.pdf

In this episode of 'Real Estate is Taxing,' host Natalie breaks down the common issue of accidental partnerships in real estate, explaining how they are often unknowingly created and the complications they bring to tax filings.

She outlines the key facts about partnerships, including the forms and reports required, and provides multiple solutions for managing these accidental situations, such as treating them as disregarded entities or qualified joint ventures. Listeners also get strategic advice on dealing with late partnerships and ensuring they do not fall foul of regulations. Natalie emphasizes the importance of understanding the tax implications when setting up LLCs with co-owners, which is crucial to avoiding unexpected tax complications.

00:00 Introduction to Real Estate Taxing
00:58 Understanding Partnerships and Form 1065
04:17 Common Accidental Partnerships
05:43 Solutions for Accidental Partnerships
14:47 Late Filing Relief and CPAR
21:34 Conclusion and Real-Life Example

Understanding Short-Term Rental Tax Loopholes: Key Court Cases and Revenue Rulings

Natalie discusses various court cases and revenue rulings that provide crucial guidance on this topic, including cases from 1965 to 2023. She highlights differing tax treatments based on the nature of services provided, whether the property is subject to self-employment tax, and the importance of understanding context to accurately apply tax laws. Tune in for a comprehensive overview of significant rulings and their implications for short-term rental property owners.

Link To Court Cases: https://www.natalie.tax/blog/strcases

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00:00 Introduction to Real Estate Taxing
00:28 Understanding the Short-Term Rental Loophole
01:01 Court Cases and Legal Guidance
01:55 Debunking Myths About Short-Term Rental Laws
02:59 Case Study: 1965 US Court of Appeals
07:34 Revenue Rulings and Their Impact
13:06 Two-Step Approach to Analyzing Services
15:26 Exploring Substantial Services in Real Estate
15:52 Court Cases on Retirement Benefits and Real Estate
16:28 The Holohan v. Heckler Case Analysis
19:28 Comparing Substantial Services in Different Contexts
22:11 The Woodworth Case: Partnership and Self-Employment Tax
25:46 The Morehouse Case: Land Rental and Government Programs
28:34 Recent Developments in Short-Term Rentals and Tax Implications
30:39 Conclusion and Further Resources

Understanding Real Estate Audits and Proactive Defenses If You've Done a Cost Segregation

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In this episode of 'Real Estate is Taxing,' host Natalie, minimizes the fear around audits by highlighting their low risk and focusing on practical steps to avoid common pitfalls. Key points include detailed guidance on mileage deductions, maintaining thorough records for real estate professional status, and tips on conducting cost segregation studies. Emphasizing the need for detailed and accurate record-keeping, Natalie also discusses audit trends and offers solutions to common issues faced by real estate taxpayers.

00:00 Introduction to Real Estate Taxing
00:40 Understanding Audits in Real Estate
01:55 Mileage Deduction Tips
05:40 Real Estate Professional Status
10:17 Cost Segregation Insights
25:47 Conclusion and Final Tips