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socrateaser
socrateaser, Lawyer
Category: Tax
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We are real estate professional and own some rental properties.

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We are real estate professional and own some rental properties. We did not made election to group these properties during 2011 tax year for rental lose. Can We file an amendment to IRC 469(c)(7)(A) to group these properties now.
Hello,

IRS Rev. Proc. 2011-34 provides a detailed explanation of the requirements necessary to make a late election under IRC 469(c)(7)(A). Generally a late election can be made, as long as the IRS has not already discovered the error in your tax return. There are several other exceptions, but the best one is the one I've just described.

Please let me know if I can be of further assistance.
Customer: replied 3 years ago.

Treasury Regulation 1.469-9(g) requires a tax payer to file a written statement and attached it to the original return. this election can not be made on an amended return or during an audition. Dose this matter.


 


Also , where to get the Form to file 469(c)(7)(a), or a statement will be enough


Thank you


Treasury Regulation 1.469-9(g) requires a tax payer to file a written statement and attached it to the original return. this election can not be made on an amended return or during an audition. Dose this matter.

 

A: The comment re "original return," relates to a timely filed election. Rev. Proc. 2011-45, Section 4.02 (page 3) provides: "Procedural requirements for requesting relief. The taxpayer must attach the statement required by § 1.469-9(g)(3) to an amended return for the most recent tax year and mail the amended return to the IRS service center where the taxpayer will file its current year tax return."

 

For an excellent discussion of the procedure, see this article (scroll down to: Recent Change of Heart by the IRS—Issuance of Rev. Proc. 2011-34).

 

Also , where to get the Form to file 469(c)(7)(a), or a statement will be enough

A: There is no official IRS form -- and I find no forms available on the internet (neither free nor paid). You will have to draft your own statement by following the required procedures. Here is another simplified discussion from a different source. Hopefully, you will be able to draft an appropriate statement with the information provided.

Please let me know if I can be of further assistance.

Note: I regret that website policies prohibit me from drafting an election statement on your behalf.
Customer: replied 3 years ago.

Thank you for the very good information.


 


Is it possible that you give me the essential elements that I need to included in the statement so I can draft the amendment by my self.


 


You certainly have been providing me with excellent response .

The essential elements of the election are completely described in Section 4.01 and 4.02 of Rev. Proc. 2011-34. The statement must expressly declare that:

  • (1) the taxpayer failed to make an election under § 1.469-9(g) solely because the taxpayer failed to timely meet the requirements in §1.469-9(g);
  • (2) the taxpayer filed consistently with having made an election under § 1.469-9(g) on any return that would have been affected if the taxpayer had timely made the election. The taxpayer must have filed all required federal income tax returns consistent with the requested aggregation for all of the years including and following the year the taxpayer intends the requested aggregation to be effective and no tax returns containing positions inconsistent with the requested aggregation may have been filed by or with respect to the taxpayer during any of the taxable years;
  • (3) the taxpayer timely filed each return that would have been affected by the election if it had been timely made. The taxpayer will be treated as having timely filed a required tax or information return if the return is filed within 6 months after its due date, excluding extensions;
  • (4) the taxpayer has reasonable cause for its failure to meet the requirements in § 1.469-9(g).

 

The taxpayer must attach the statement to an amended return for the most recent tax year and mail the amended return to the IRS service center where the taxpayer will file its current year tax return. The statement must (1) expressly elect "to treat all interests in rental real estate as a single rental real estate activity," and further state that the taxpayer is a "qualifying taxpayer for the taxable year and is making the election pursuant to section 469(c)(7)(A)", (2) must explain the reason for the failure to file a timely election, and (3) must include the representations enumerated in the four paragraphs above. The statement must also (4) identify the taxable year for which it seeks to make the late election. And (5), the statement must state at the top of the document “FILED PURSUANT TO REV. PROC. 2011-34.” Lastly (6), the declaration and representations must be accompanied by a dated declaration, signed by the taxpayer which states:

 

  • “Under penalties of perjury I (we) declare that I (we) have examined this election, including any accompanying documents, and, to the best of my (our) knowledge and belief, the election contains all the relevant facts relating to the election, and such facts are true, correct, and complete.”

 

Note: The individual or individuals who sign must have personal knowledge of the facts and circumstances related to the election. The Rev. Proc. does not require that the taxpayer actually declare such personal knowledge -- however, if someone without personal knowledge signs the statement, then that would invalidate the statement if the lack of personal knowledge is later discovered in court.

Hope this helps.

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