As discussed briefly in the last issue of Agricultural Law Digest, multiple entities can be a significant problem in dealing with the “at risk” rules depending upon the facts and circumstances of how the trade or business is structured.1 Generally, each activity is considered separately2 but the statute states that a taxpayer is to aggregate all separate activities that constitute a single trade or business under two circumstances – (1) when the taxpayer actively participates in the management of the trade or business or (2) when an S corporation or partnership is involved and 65 percent or more of the losses are allocated to those actively involved in the management.3 In addition, regulations allow all partnership and S corporation interests engaged in farming to be aggregated.4



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