107 STAT. 440 PUBLIC LAW 103-66—AUG. 10, 1993 tenants in such building do not increase as a result of such election. (4) An election under this subsection may be made only during the 180-day period beginning on the date of the enactment of this Act and, once made, shall be irrevocable. Subpart B—Passive Loss Rules SEC. 13143. APPLICATION OF PASSIVE LOSS RULES TO RENTAL REAL ESTATE ACTIVITIES. (a) RENTAL REAL ESTATE ACTIYITIES OF PERSONS IN REAL PROP- ERTY BUSINESS NOT AUTOMATICALLY TREATED AS PASSIVE ACTIVI- 26 USC 469. TIES. —Subsection (c) of section 469 (defining passive activity) is amended by adding at the end thereof the following new paragraph: "(7) SPECIAL RULES FOR TAXPAYERS IN REAL PROPERTY BUSI- NESS.— "(A) IN GENERAL.—If this paragraph applies to any taxpayer for a taxable year— "(i) paragraph (2) shall not apply to any rental real estate activity of such taxpayer for such taxable year, and " (ii) this section shall be applied as if each interest of the taxpayer in rental real estate were a separate activity. Notwithstanding clause (ii), a taxpayer may elect to treat all interests in rental real estate as one activity. Nothing in the preceding provisions of this subparagraph shall be construed as Einecting the determination of whether the taxpayer materially participates with respect to any interest in a limited partnership as a limited partner. "(B) TAXPAYERS TO WHOM PARAGRAPH APPLIES. — This paragraph shall apply to a taxpayer for a taxable year if—
- (i) more than one-half of the personal services
performed in trades or businesses by the taxpayer during such taxable year are performed in real property trades or businesses in which the taxpayer materially participates, and (ii) such taxpayer performs more than 750 hours of services during the taxable year in real property trades or businesses in which the taxpayer materially participates. In the case of a joint return, the requirements of the preceding sentence are satisfied if and only if either spouse separately satisfies such requirements. For purposes of the preceding sentence, activities in which a spouse materially participates shall be determined under subsection (h). "((J) REAL PROPERTY TRADE OR BUSINESS. —For purposes of this paragraph, the term 'real property trade or business' means any real property development, redevelopment, construction, reconstruction, acquisition, conversion, rental, operation, management, leasing, or brokerage trade or business. "(D) SPECIAL RULES FOR SUBPARAGRAPH (B). — "(i) CLOSELY HELD CORPORATIONS. —In the case of a closely held C corporation, the requirements of subparagraph (B) shall be treated as met for any tax-
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