When is a Taxpayer a Real Estate Dealer?

  • April 21, 1996
  • • Written by: J. Russell Hardin Morris H. Stocks 

April 1996, Vol 21, No 1

Abstract: For individuals involved in real estate transactions, the distinction between a real estate dealer and a real estate investor has important tax consequences. The pending capital gains legislation in Congress makes this distinction even more significant and relevant. Since an authoritative list of distinction-making criteria does not exist in the Internal Revenue Code or the Treasury Regulations, it is necessary to turn to the judicial opinions of related cases. The article presents a list of critical factors to use in planning real estate transactions either as a real estate dealer or investor.