Physician’s Surgery Activities Can’t be Grouped with Surgical Rental Business

The Tax Court held that a doctor was correct in recategorizing income from nonpassive to passive and the IRS could not regroup the doctor's plastic surgery activity with his investment in a business entity that rents out surgical space. However, because the issue was not previously raised, the doctor was not entitled to use that recharacterized passive income to offset prior year passive losses. Finally, because the doctor was an investor in the surgical space rental activity and was not involved in the operations of the business, his distributive share of income from that business was not subject to self-employment tax. Hardy v. Comm'r, T.C. Memo. 2017-16.

 

Have questions? I’m here to help.

Categories
Accounting and Tax Services Litigation Support Managed Care Consulting Managed Care Contract Negotiations Medical Practice and Healthcare Entity Valuation Medical Practice Assessment Medical Practice Brokerage Medical Practice Embezzlement Consulting Medical Practice Management Medical Practice Merger Advice Medical Strategic Planning Newsletter Personal Financial Planning Oversight Physician Compensation Models Physician Compliance Physician Financial Management Services Retirement Uncategorized
About Reed Tinsley, CPA

As a top advisor to physicians, I help increase practice profits by delivering hands-on, expert medical accounting/tax support, practice counsel, and revenue-building strategies. Read More >

Reed Tinsley, CPA for Physicians