You first need to qualify as a real estate professional and then also need to materially participate in your rental real estate activities.
Simply qualifying as a real estate professional (e.g., more than half of personal services performed in all trades or businesses were performed in real property trades or businesses, and (2) more than 750 hours of services were performed in real property trades or businesses) is not sufficient.
If you do qualify and materially participate, then you most likely will have to move the figure entered on your Schedule E from the passive column to the nonpassive column in Part II since you entered the figure from a K-1.
