Failure to Aggregate Rental Property: Late Election May Be an Option

Robert S. Barnett, JD, CPA, MST

In the August 2011 CPA Journal, this author discussed a recent revenue procedure that provided guidance for taxpayers engaged in certain passive activities (Robert S. Barnett, “Revenue Procedure 2010-13 Provides Guidance for Passive Activity Groupings”). That article described how the aggregation of activities may be beneficial, as well as the procedures to follow for late elections. The article stated that the IRS Office of Chief Counsel was contemplating a streamlined procedure for a late election to aggregate multiple rental properties. The IRS has now issued a new pronouncement, Revenue Procedure 2011-34, which provides such relief for qualifying real estate professionals.