Some tax advisors refer to client situations as having either “good facts” or “bad facts”.  Good facts lead to favorable tax returns, but the opposite is true for bad facts.  In real estate scenarios, good facts pertain to adequate documentation of  business activities as well as the activities themselves.  Real estate holdings lead to favorable tax treatment because of the taxpayers’ good facts.  Also need expert tax advice from a CPA and/or financial advisor.  MORE COMING FROM Dr. Jerrold Stern from the Texas A&M Real Estate Center & Indiana University.