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Posted by Stuart Bronstein on July 19, 2007, 10:32 pm
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>> Whoa!! Hold on! What's wrong with the CPA's advice? If
>> you read the OP statement carefully, you will see that this
>> house may not the second home but the third! OP is already
>> deducting interest on two properties. We need more facts to
>> be able to tell what is going on here but the position of
>> the CPA is not, on the surface, outrageous.
> I'm under the impression that the so-called "2nd home" is
> actually a rental property and the CPA advised the poster on
> the implications of the passive loss rules.
First of all, OP called it a second "home" not a rental
property. That's not definitive, but I've seldom if ever
heard people call a property a home if it's a rental.
But if that were the reason, the CPA should have explained
it. That's not a hard concept to understand.
But in addition to that, the passive loss rules don't apply
(up to a limit) to rental real estate of the owner "actively
participates" in its management.
I suppose there is a small chance the CPA is right. But if
he is and either wouldn't or couldn't explain it so the OP
could understand it, he needs a new CPA anyway.
Stu
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