Fifth Circuit - Active participation exception for ranch operations upheld 

May 22:  The U.S. Court of Appeals for the Fifth Circuit today affirmed a federal district court judgment denying the government’s attempt to tax a ranch as a “farming syndicate” tax shelter but instead finding that an individual who participated in the management of farming operations for not less than five years comes within the “active participation exception” under section 464(c)(2)(A), irrespective of the fact that the legal title of that person’s attributable interest was held in the name of her wholly owned S corporation, rather than in her own name. Burnett Ranches, Ltd. v. United States, No.13-10403 (5th Cir. May 22, 2014)

Read the Fifth Circuit’s opinion [PDF 158 KB]

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