Perspective
Apr. 16, 2014
Can we trust the latest guidance on material participation?
A court recently addressed whether a complex trust can materially participate in a real estate trade or business for purposes of the passive activity loss rules of the Internal Revenue Code. By Stefanie J. Lipson and Lora A. Cicconi
In a much awaited decision addressing whether a complex trust can "materially participate" for purposes of the passive activity loss rules of Internal Revenue Code Section 469 (and, by extension, the 3.8 percent "Medicare" tax under Section 1411), the Tax Court in Frank Aragona Trust v. Commissioner (142 T.C. No. 9, March 27, 2014) has confirmed that services performed by individual trustees ...
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