Federal Tax Research 10th Edition by Roby Sawyers,William Raabe,Gerald Whittenburg,Steven Gill

Exercise 18

Richie is a wealthy rancher in Texas. He operates his ranch through a grantor trust set up by his grandparents. Richie does not like to get his hands dirty, so he hires a professional management company to run the ranch. The property generated a $500,000 loss this year. Can Richie deduct this loss on his Schedule E given the material participation rules of I.R.C. § 469