Can real estate qualify for the family business deduction?
August 18, 2000
Date: Thu 27 Jul 2000
From: Anonymous
We own a lot of rental real estate and the IRS has a special deduction for family run businesses. My question is does real estate that is income producing that has been held for 50 years and in which the heir is active qualify for the family business deduction?
Answer
Date: 28 Jul 2000
I think your question relates to the new estate tax deduction relating to a family business.
Real estate that is passively rented does not qualify for the deduction. Real estate used for a family farm or in a trade or business, such as a motel, may qualify.
The tax rules relating to this deduction are very complex. If you want to plan for using the deduction, I recommend you work with a good estate planning attorney.
Good luck!
Mike Gray
For answers to new questions, subscribe to our newsletter, Michael Gray, CPA's Tax & Business Insight by filling out the form below.
Home Newsletter Archive Introducing Michael Gray, CPA Articles Tax FAQ Need Help? Other Links
© 2025
Connect on LinkedIn
Connect on BlueSky
Connect on Instagram
Our Blog