Can you tell me what it means to be an active participant?

Forum|Forum|5 years ago
May 2, 2021
2 replies
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DavidD66

Level 15

If you are referring to rental property, You actively participated in a rental real estate activity if you (and your spouse) owned at least 10% of the rental property and you made management decisions or arranged for others to provide services (such as repairs) in a significant and bona fide sense.

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Carl

Level 11

IRS Publication 925 page 4 at https://www.irs.gov/pub/irs-pdf/p925.pdf defines active participation.

Active participation.

Active participation isn’t the same as material participation (defined later). Active participation is a less stringent standard than material participation. For example, you may be treated as actively participating if you make management decisions in a significant and bona fide sense. Management decisions that count as active participation include approving new tenants, deciding on rental terms, approving expenditures, and similar decisions.