KPMG report: “Material participation” under section 469

KPMG report: “Material participation” under section 469

A U.S. Tax Court opinion is the first case that has allowed a taxpayer to satisfy the “material participation” test by working in the activity for more than 100 hours and not less than any other person. The Tax Court thus determined that the taxpayer’s losses were not limited by section 469 because the taxpayer materially participated in farming activity that generated the losses.

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The taxpayer’s efforts to maintain the farm included maintaining roads and fences and hunting hogs, and the taxpayer credibly reconstructed participation hours. 

 

Read a January 2016 report [PDF 148] prepared by KPMG LLP: What’s News in Tax: Section 469 Meets Texas Hog Hunting

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