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The IRS lost a key battle in its fight to limit tax deductions that can be taken by investors. The new decision allows investors in certain kinds of businesses to deduct losses against salary and investment income.
Previously, investors could only deduct losses in a business against future profits from that business, which in some cases prevents taxpayers from getting to use the deductions at all.
The decision specifically applies to limited-liability companies (LLCs) and limited-liability partnerships (LLPs) and benefits those who actively work in several businesses. Under this decision, losses from the two businesses could offset salary or investment income earned by both.
The IRS has long taken the position that losses generated by businesses held within LLPs and LLCs can’t generally be used to offset salary and investment income, which forced investors in LLPs and LLCs to delay loss deductions, sometimes for years.
This is a blog post for Real Estate Professionals, Investors, Landlord, Property Manager, and Property Management Companies. Real Estate Investors Can Beat the IRS! is brought to you by SimplifyEm Pay Rent Online and Property Management SoftwareYou might also want to read:
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