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PASSIVE LOSS NO LONGER A 'PASSIVE' ISSUE SAYS BOMA FIRST VICE PRESIDENT

 PASSIVE LOSS NO LONGER A 'PASSIVE' ISSUE
 SAYS BOMA FIRST VICE PRESIDENT
 WASHINGTON, Feb. 5 /PRNewswire/ -- Thomas B. McChesney, first vice president of the Building Owners and Managers Association (BOMA) International, today addressed the House Ways and Means Committee regarding modifications to the passive loss rules as a way to correct the serious difficulties facing the real estate industry.
 "We need to reach a mid-point -- a fair equilibrium where real estate practitioners will be treated the same as other business professionals," stated McChesney. "Corrections to the passive loss rules would permit those professionals active in real estate to use the inevitable losses occurring in the early years of an investment to offset those losses against other income, as in the case in any other business. In no way would it invite 'passive speculators,' nor be a 'get rich' scheme for investors. In fact, investors would be excluded unless they took the full risk of being material participants in the real estate business."
 Typically, up-front acquisition, renovation, and compliance costs are the greatest in the early years of a real estate investment project and, as a result, real estate professionals know there are significant up-front losses, losses that currently can not be credited against other income. "Modifications to passive loss may not have an impact on major urban buildings and centers, but it will help the smaller, local real estate professional -- throughout the country," stated McChesney. "The modification will give that person a reason to buy that under-utilized property from the RTC or from a bank portfolio and turn the property into a useful, taxpaying asset in the local community. We are not talking about a tax shelter, but rather a sound, economic policy."
 BOMA International, founded in 1907, is the oldest and largest trade association exclusively representing the office building industry. The members of its 100 local associations own or manage more than 5 billion square feet of office space in North America.
 -0- 2/5/92
 /CONTACT: Jeanie Markel or Henry Chamberlain of BOMA International, 202-408-2686/ CO: Building Owners and Managers Association ST: District of Columbia IN: CST SU: LEG


DS-MK -- DC040 -- 7429 02/05/92 18:16 EST
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Date:Feb 5, 1992
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