Hi All,
This came up Tuesday evening at a tax update meeting and I continue to find differing opinions on this issue. If a person makes the election to be treated as a real estate professional would that result in subjecting net rental income to SE tax? IRC 1402(a)(1) specifically excludes rental income from SE tax (except for dealers and where services provided). Does making the election and raising all real estate activities to level of "trade or business" trump 1402 and then subject rent to SE tax? This could be an issue under ACA additional tax.
It never ceases to amaze me that I can be in a room of tax professionals, whom I know and respect (all of you) and we often times can not come up with answers. It is an observation of the complexity of what we deal with on a daily basis. Best of luck to all for a safe, prosperous and stress free tax season!
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Robert Sick
ROBERT SICK, CPA PLLC
Patchogue NY
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