Real estate activities vs. investments: Why it matters

Description

Abstract: The characterization of a real estate entity’s activities as a business or an investment makes a big difference to the bottom line when it comes to taxation. In Conner v. Commissioner, a developer whose plans were derailed by the Great Recession recently learned this lesson the hard way. This article summarizes the legal case and the importance of holding property as either an investment or in the course of business. Conner v. Comm’r, No. 2018-6 (Tax Ct. Jan. 22, 2018)