In that case, the taxpayer had individuals testify to his character and work in court, which is an unusual scenario and highlights the difficulty of making such a claim.If the TP cannot qualify for REPS, they may still be eligible to claim material participation in the deals, even with less than 5% ownership in some of them.

This is a common question I see.

Two critical components are key to legally performing the above scenario. 1st, there must be consideration for a real estate transaction to be valid.

This is probably not real common on residential, but we see it now and then. 

So in your scenario the houses are too expensive so people stop purchasing them and investors sell a commodity in short supply at a loss? 

Hi all - my wife and I are planning on a April 2025 1031 exchange into a larger (for us at least...like 5-8 units) multifamily unit. An idea we have is, I am burnt out from W2 life, and wife makes great money (+$300k)...

In PA, Special Warranty is probably the most common which guarantees the title against issues that came into existence during the seller's ownership.

It’s very common since it’s considered a business purpose loan.

Hey James,That’s a solid question, and I’ve seen this scenario come up quite a bit.

You must clearly define roles and responsibilities while addressing all the what-if scenarios.