Extension of Time for Making Certain Elections

LEGEND:
A = ---
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B = ---
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Year = ---
Dear ---:
This responds to a letter dated March 8, 2017, submitted on behalf of A and B by their authorized representatives, requesting an extension of time under § 301.9100-3 of the Procedure and Administration Regulations for A and B to file an election under § 469(c)(7) of the Internal Revenue Code and § 1.469-9(g)(3) of the Income Tax Regulations to treat all interests in rental real estate as a single rental real estate activity.

# Facts

According to the information submitted, A and B are married individuals who file their tax returns jointly. A and B represent that in Year A was engaged in a real property trade or business as defined in § 469(c)(7)(C) and qualified under §469(c)(7)(B) to make an election to treat all interests in rental real estate as a single rental real estate activity. However, A and B inadvertently filed their joint return for Year without the statement required under § 1.469-9(g)(3).
Internal Revenue Service Department of the Treasury
Washington, DC 20224
Number: 201725003
Release Date: 6/23/2017
Index Number: 469.03-03, 9100.00-00
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Third Party Communication: None
Date of Communication: Not Applicable
Person To Contact:
---
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Telephone Number:
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Refer Reply To:
CC:PSI:B03
PLR-108244-17
Date:
March 23, 2017
PLR-108244-17 2

# Law and Analysis

Under § 469(c)(2), the term “passive activity” generally includes any rental activity. Section 469(c)(7) provides a limited exception to this rule for taxpayers in a real property trade or business. Specifically, § 469(c)(7)(A) indicates that if a taxpayer meets the requirements of § 469(c)(7)(B), the taxpayer's rental real estate activity will no longer be presumptively passive. By its terms, the exception under § 469(c)(7)(A) is to be applied as if each interest of the taxpayer in rental real estate were a separate activity. However, a taxpayer may elect to treat all interests in rental real estate as a single activity.
Section 1.469-9(g)(3) provides that a qualifying taxpayer makes the election to treat all interests in rental real estate as a single rental real estate activity by filing a statement with the taxpayer's original income tax return for the taxable year. Section 1.469-9(g)(3) describes the information that must be contained in the statement.
Under § 301.9100-1(c), the Commissioner may grant a reasonable extension of time to make a regulatory election, or a statutory election (but no more than 6 months except in the case of a taxpayer who is abroad), under all subtitles of the Internal Revenue Code except subtitles E, G, H, and I. Section 301.9100-1(b) defines the term “regulatory election” as including an election whose due date is prescribed by a regulation published in the Internal Revenue Bulletin.
Sections 301.9100-1 through 301.9100-3 provide the standards the
Commissioner will use to determine whether to grant an extension of time to make an election.
Section 301.9100-2 provides the rules governing automatic extensions of time for making certain elections. Section 301.9100-3 provides the standards the Commissioner will use to determine whether to grant an extension of time for regulatory elections that do not meet the requirements of § 301.9100-2.
Section 301.9100-3 provides that requests for relief under § 301.9100-3 will be granted when the taxpayer provides evidence to establish to the satisfaction of the Commissioner that the taxpayer acted reasonably and in good faith, and that the grant of relief will not prejudice the interests of the government.

# Conclusion

Based solely on the information submitted and the representations made, we conclude that the requirements of §§ 301.9100-1 and 301.9100-3 have been satisfied.
As a result, A and B are granted an extension of time of 120 days from the date of this letter to make an election under § 469(c)(7)(A) to treat all their interests in rental real estate as a single rental real estate activity effective Year. The election must be in the PLR-108244-17 3 form of the statement required by § 1.469-9(g)(3) and attached to an amended return for Year. A copy of this letter should be attached to the election. A copy is enclosed for that purpose.
Except as specifically set forth above, no opinion is expressed concerning the federal tax consequences of the facts described above under any other provision of the
Code. Specifically, no opinion is expressed concerning whether A satisfies the requirements under § 469(c)(7)(B) or whether A and B materially participated in any activity.
This ruling is directed only to the taxpayers requesting it. Section 6110(k)(3) of the Code provides that it may not be used or cited as precedent.
In accordance with the power of attorney on file with this office, we are sending a copy of this letter to your authorized representative.
Sincerely,
Associate Chief Counsel
(Passthroughs & Special Industries)
By: ____
James A. Quinn
Senior Counsel, Branch 3
Office of the Associate Chief Counsel
(Passthroughs & Special Industries)
Enclosures (2):
Copy of this letter
Copy for § 6110 purposes