passive investor

passive investor

One who does not actively participate in a trade or business.Generally,a passive investor may not take advantage of certain tax deductions,such as the Section 179 deduction allowing the full deductibility of some capital expenditures—up to certain dollar limits—in the current year rather than the normal method of capitalizing and then depreciating them.

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Therefore, a passive investor in a flowthrough entity cannot use income from that entity in the income calculation.
Passive investor: An investor who has no active role in operation or construction; participates only to earn a return on and of his investment.
Other directors insist that the Royal Bank will never take a minority stake as a passive investor, only as a route to joint ventures, where it can use its skills.
Morris was actively engaged in the full-time practice of medicine and was a passive investor in the corporation, it would probably qualify as a nonbusiness bad debt and receive short-term capital loss treatment (subject to the $3,000 annual limit on deducting a net capital loss).
However, since there must be active participation, if the partner or shareholder is simply a passive investor, the entity's income or loss will not be included.
AIG chief Robert Benmosche said: "While ILFC is an extremely strong business platform and AIG will retain a minority stake as a passive investor, the aircraft leasing business is not core to our insurance operations," adding that the sale will profit AIG's bottom line.
Peters Group is a long-term, passive investor that was seeking to capitalize on the tax advantages of ownership in the U.S.," he explained.
Passive investor: A passive investor is one who believes that securities are efficiently priced and does not try to "beat the market." The passive investor holds securities for a long time, making only small and infrequent changes.
Therefore, the taxable income from activities in which a taxpayer is a mere passive investor, merely holds property for the production of income, or engages in an activity not entered into with a profit motive, is not taken into account for the taxable income limitation (Regs.
Since the taxpayer was simply a "money man" who played no part in the choosing, subdividing or selling of the lots, may he take the position that he was a passive investor and not a "dealer" of real property?
A passive investor in a trade or business is not considered to have meaningfully participated in management or operations and thus is unable to claim Sec.
Passive investor Tanfield's pretax loss for the six months ended June 30 was GBP127,000, many times smaller than its GBP17.3 million loss the year before.
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