Welcome Guest. Register Now!  



Reply
 
LinkBack Thread Tools Search this Thread Display Modes
  #1 (permalink)  
Old 04-02-2014, 02:22 PM
Junior Member
 
Join Date: Apr 2014
Posts: 3
Active vs passive participation

Help, must we be a professional with a license in order to use the material/active participation checkbox? I am an engineer by day and a serious investor/property mgr by nite, but no license, just manage/repair my own properties (9 separate houses)

all located in CA

thanks,

Lee



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
  #2 (permalink)  
Old 04-02-2014, 06:14 PM
Moderator
 
Join Date: Oct 2010
Posts: 5,236
Quote:
Originally Posted by brewbag View Post
Help, must we be a professional with a license in order to use the material/active participation checkbox? I am an engineer by day and a serious investor/property mgr by nite, but no license, just manage/repair my own properties (9 separate houses)
To meet the active participation rule you must own at least 10 percent of the property and have made management decisions or arranged for others to provide services in a significant and bona fide sense. Examples of active participation, according to the IRS, include advertising rentals, collecting rent, making repairs or hiring someone to make repairs.In general, renting property is classified as a "passive activity" by the IRS since you are providing an asset from which you receive income which is classified as passive. An exception to the limitation on deducting passive losses is provided for rental real estate in which you "actively participate. If you meet the active participation test, you can subtract up to $25k in passive losses from your nonpassive income. So, you will be considered active if you are involved with the operation of your rental. However, you must be exercising independent judgment and not simply ratifying decisions made by a manager or management company.



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
  #3 (permalink)  
Old 01-14-2015, 12:32 AM
Junior Member
 
Join Date: Jan 2015
Location: USA
Posts: 16
Active participation, according to the IRS, include advertising rentals, collecting rent, making repairs or hiring someone to make repairs.In general, renting property is classified as a "passive activity" by the IRS since you are providing an asset from which you receive income which is classified as passive.



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
Ads
Reply


Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

vB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
"Active Participation" Question mmpotash Rental Real-Estate 1 03-20-2014 10:30 AM
Passive or Non-passive determination StinkyTaxLaw Limited Liability Company 4 03-16-2014 08:35 AM
How can a taxpayer show material participation in a business activity and avoid passive loss limitation rules? TaxGuru Rental Real-Estate 0 01-31-2012 08:26 PM
How can a Taxpayer meet the Material Participation Rule and avoid the Passive Rule Limitation Rules being applied to activities with losses? TaxGuru Rental Real-Estate 1 08-02-2011 05:12 PM
Should I dissolve S Corp or let be active? Taxrookie S-Corporation 5 01-25-2009 10:25 PM

Follow us on Facebook Follow us on Twitter Google Buzz Rss Feeds

» Categories
 
Individual
 » Income
 » IRA/Sep
 » Medical
 
Corporations
 » Payroll
 
Forum for CPAs
 
Financial Planning