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Passive Activities & Rental Real Estate Income Tax Issues

Total Credits: 8 including 8 Taxes - Technical

Average Rating:
ACPEN Industry Institute |  Tax |  ACPEN Tax Institute |  IRS Approved
J. Patrick Garverick, CPA, MT, CFP®
Course Levels:
8 Hours
Product Setting: Expires 30 day(s) after program date.



This comprehensive training is designed to get the accountant up to speed quickly with the complex passive activity loss (PAL) rules that apply to certain investments in trades or businesses and rental activities. The cornerstone of the course is the in-depth coverage of the detailed tax law and regulations applicable to passive activities under IRC §469 and how and when the 3.8% net investment income tax under §1411 applies.

**Please Note:  If you need credit reported to the IRS for this IRS approved program, please download the IRS CE request form on the Course Materials Tab and submit to

Basic Course Information

Learning Objectives
  • Identify what activities are subject to the PAL rules and the exceptions to them including those for certain real estate professionals
  • Define a passive activity, rental and trade or business under IRC §469
  • List the seven ways to materially participate in an activity and the six exceptions to the definition of a rental activity
  • Calculate the passive activity income and losses allowed and the tax ramifications of passive activity dispositions
  • Recognize what passive activity investments are potentially subject to the 3.8% net investment income tax under IRC §1411

Major Subjects
  • Detailed coverage of the passive activity rules under IRC §469 (and related regulations), how the 3.8% net investment income tax under §1411 and qualified business income (QBI) deduction under §199A applies to rentals and passive activities, and what is a trade or business rental is under §162
  • How the PAL rules apply to rental real estate activities and investments in S corporations and partnerships
  • Definition of an activity and the activity grouping and disclosure rules
  • Real estate professional exception to the PAL rules for investments in non-passive rentals
  • Special $25,000 loss allowance for rental real estate with active participation
  • Material participation safe harbor rules
  • Events that trigger suspended PALs
  • Limitations on tax credits generated by passive activities
  • Special rules that re-characterize passive income to non-passive income
  • What rentals are subject to self-employment tax under §1402

Course Materials


J. Patrick Garverick, CPA, MT, CFP®'s Profile

J. Patrick Garverick, CPA, MT, CFP® Related Seminars and Products

Pat Garverick is a Certified Public Accountant who currently lives in the Phoenix, Arizona area. He began his career in public accounting in 1988 after obtaining his Bachelor of Science in Business Administration (BSBA) in Accounting from The Ohio State University. After receiving his Master of Taxation (MT) degree from Arizona State University in 1992, Mr. Garverick began operating his own tax and financial planning business. He also started writing, reviewing, and teaching tax and financial planning continuing professional education courses around the country.

In addition to being a CPA, Pat is also a Certified Financial Planner (CFP®). This role serves to enhance the knowledge he brings as he writes and presents continuing education material. Mr. Garverick is a member of the Arizona Society of Certified Public Accountants, and the American Institute of Certified Public Accountants. Pat has presented continuing education sessions throughout the country and has won awards for both his skills as an instructor as well as for the content he has created. His knowledge, expertise, and high energy have made him one of the profession’s most highly rated speakers. He is in a very small group of instructors that are both extremely knowledgeable and interesting.

During his time in college Pat earned a letter as a member of the Ohio State Basketball squad. He remains a stanch supporter of the sports programs at his alma mater.



Fri, Aug 16, 2024 - 10:00am to 05:38pm EDT
Wed, Sep 18, 2024 - 10:00am to 05:38pm EDT
Mon, Oct 07, 2024 - 10:00am to 05:38pm EDT
Fri, Nov 15, 2024 - 10:00am to 05:38pm EST
Wed, Dec 18, 2024 - 10:00am to 05:38pm EST
Mon, Jan 13, 2025 - 10:00am to 05:38pm EST
Mon, Feb 10, 2025 - 10:00am to 05:38pm EST

Additional Info

Basic Course Information

Prerequisites Background in individual income tax law
Advanced Preparation Background in individual and business income tax law
Designed For Tax professionals that need an in-depth training course on the passive activity loss rules and how they apply to certain investments in trades or businesses and rental activities.
Original Recording Date 08/2023
Course Developer The Tax U
Date Added to Catalog 08/26/2023
Yellow Book No

Additional Information

Complaint Resolution Policy

Please contact Anne Taylor for any complaints., (972-377-8199). 

Official Registry Statement

Business Professionals' Network, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website:

Instructional Delivery Method

Group Internet Based

Course Registration Requirements

Online Registration

Refund/Cancellation Policy

Please contact the ACPEN help desk 1-877-602-9877 or if you wish to cancel your attendance for a previously purchased webcast and are requesting a refund or transfer. 



Overall:      4.9

Total Reviews: 14


Bradley O

"Appreciated the presentation format not having power points and I did like seeing the examples provided in handwritten tablet"

Eric B - baltimore, Maryland

"Liked Pat's white board and the way he presented examples. Thanks Pat!"