Their losses are exempt from the passive loss rules, the Tax Court says. The exemption applies only to agents who spend more than half of their time and at least 750 hours per year materially involved in real estate…the same rule that applies to landlords, developers and brokers. The IRS said that agents were not covered, but the Tax Court disagreed (Agarwal, TC Summ. Op. 2009-29). In this case, the agent who was audited was not licensed as a real estate broker.
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