(c)Passive activity defined
For purposes of this section—
(1)In general
The term “passive activity” means any activity—
(A)which involves the conduct of any trade or business, and
(B)in which the taxpayer does not materially participate.
(2)Passive activity includes any rental activity
Except as provided in paragraph (7), the term “passive activity” includes any rental activity.
(h)Material participation defined
For purposes of this section—
(1)In general
A taxpayer shall be treated as materially participating in an activity only if the taxpayer is involved in the operations of the activity on a basis which is—
(A)regular,
(B)continuous, and
(C)substantial.
(2)Interests in limited partnerships
Except as provided in regulations, no interest in a limited partnership as a limited partner shall be treated as an interest with respect to which a taxpayer
