for the rental real estate activities is active participation checked or is material participation checked or neither?
are the rental real estate activities aggregated/grouped as 1 activity?
is A rented to friends or relatives at below fair rental value?
active participation defined
You may be treated as actively participating if, for example, you participated in making management
decisions or arranged for others to provide services (such as repairs) in a significant and bona fide sense.
Management decisions that may count as active participation include:
• Approving new tenants,
• Deciding on rental terms,
• Approving capital or repair expenditures, and
• Other similar decisions.
material participation defined
You materially participated for the tax year in an activity if you satisfy at least one of the following tests.
1. You participated in the activity for more than 500 hours.
2. Your participation in the activity for the tax year was substantially all of the participation in the activity of all
individuals (including individuals who didn’t own any interest in the activity) for the year.
3. You participated in the activity for more than 100 hours during the tax year, and you participated at least as
much as any other individual (including individuals who didn’t own any interest in the activity) for the year.
4. The activity is a significant participation activity for the tax year, and you participated in all significant
participation activities during the year for more than 500 hours. A significant participation activity is any trade or business activity in which you participated for more than 100 hours during the year and in which you didn’t
materially participate under any of the material participation tests (other than this fourth test).
5. You materially participated in the activity (other than by meeting this fifth test) for any 5 (whether or not
consecutive) of the 10 immediately preceding tax years.
6. The activity is a personal service activity in which you materially participated for any 3 (whether or not
consecutive) preceding tax years. An activity is a personal service activity if it involves the performance of personal services in the fields of health, law, engineering, architecture, accounting, actuarial
science, performing arts, consulting, or in any other trade or business in which capital isn’t a material
income-producing factor.
7. Based on all the facts and circumstances, you participated in the activity on a regular, continuous, and
substantial basis during the tax year. You didn’t materially participate in the activity under this seventh test, however, if you participated in the activity for 100 hours or less during the tax year. Your participation in managing the activity doesn’t count in determining whether you materially participated under this test if:
a. Any person (except you) received compensation for performing services in the management of the activity, or
b. Any individual spent more hours during the tax year performing services in the management of the activity
than you did (regardless of whether the individual was compensated for the management services)
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for the k-1 what boxes did you check for the following:
1) what type of partner?
2) for the loss on line 1 what type of activity?
3) is material participation unchecked? (see above for definition)
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finally, for the 8582 tell us the amounts showing up and the related line number. round to thousands. indicate loss with a minus sign.
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