Thomas M. Brinker Jr., Professor and Accounting Program Coordinator, published an article in the Sept. 1 Journal of Financial Service Professionals, “The Self-Rental Dilemma: Is Net Rental Income or Loss Active or Passive for Planning.”
Brinker states in his Abstract: “Section 469 and the passive activity loss rules are mind numbingly complex and are often laden with tax traps. An advisor’s recommendation to create a 'self-rental' net rental income to absorb other passive activity losses appears, on the surface, to be sound planning. However, financial planners need to be alert to some of these planning pitfalls under Section 469, not the least of which are 'self-rental' rules of Temp. Treas. Reg. 1.456-2T (f)(6).” Read the story.