@AmeliesUncle . thanks for clarifying... so to summarize the big picture ... is the following statement true.
the 'perfect scenario' (for airbnb type rental owners in a partnership/LLC) is to materially participate but NOT provide services. because in this case...
a) when you have a net income - it flows to the partners return as income but NO self employment taxes owed
b) when you have a net loss - it flows to partners return and effectively reduces their W2 income and lowers their taxes owed (ie not treated as a passive loss)
did i capture that correctly?
Thanks!
