This course is particularly important in helping clients prepare for IRS audits as well as in handling ongoing audits involving material participation challenges. Topics covered include: How material participation affects the passive loss rules; How material participation affects the NIIT; Tests of material participation found in the regulations; Detailed review of court decisions evaluating how to document material participation; Analysis of lessons learned by prior court challenges. After completing this course, you should be able to: Describe the seven tests for material participation; Recognize how to best defend your clients against a material participation challenge; Identify which types of taxpayers the passive activity loss rules are applicable to; Recognize the tests a limited partner may use to establish material participation; Differentiate court cases where the IRS prevailed with respect to disputes related to material participation and key lessons learned; Define what happens when suspended losses may offset income when a closely held C corporation (CHC) becomes a non-CHC; Differentiate correct statements with respect to material participation; Identify how material participation tests are applied in various cases; Recognize which types of expenses were required to be proved with contemporaneous written logs based on the requirements of DEFRA in 1984; Define how each of indicator of no material participation is applied, based on the IRS Audit Guide; Recognize the number of hours a person must devote to real estate activities for a person to qualify as a real estate professional.