Revenue Procedure 2010-13, Rev. Proc. 2010-13, Passive Activity Issues

The Internal Revenue Service (IRS) recently issued Revenue Procedure 2010-13. This Rev. Proc. requires taxpayers to file a statement that is attached to their income tax return that declares that separate activities are grouped together for purposes of the passive-loss rules. If this statement is not attached to the return the IRS could contend that the taxpayer’s business aircraft operations are a separate passive activity. The consequence of failing to file the statement is that tax losses incurred by operations may be limited and therefore not be deductible against the operating income of the business’s primary income. If you have questions or need clarification about Rev. Proc. 2010-13 click here to contact Paul.