To some extent, you determine if the activity is passive or not when you prepare your personal tax return. So, if you were actively involved in the business in 2021 and the business activity is considered non-passive, then when you report the K-1 on your personal tax return, you would indicate that you are actively involved with the business.
Also, the type of income you report would be a determining factor. Short-term rentals could be reported as business income, thus showing up on line 1 of your K-1 schedule, as opposed to rental income in box 2. Rental income is passive by default, but ordinary income is typically active income if you are materially involved with the business.
So, assuming your rental activities qualify for ordinary income treatment, you report the income and expenses on page one of your form 1065 partnership return as opposed to the rental schedule 8825 for rental activity. Then, when you prepare your personal tax return, indicate that you were actively involved with the business.
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