If you are referring to ACTIVITY GROUPING ELECTION - Aggregating Activities for Passive Loss Rules click the link here for more information:
If the other business activity is not rental property then proceed with caution is you choose to group them together.
If you have two rental units/houses then you can combine them into one rental activity but it's not suggested. It's important to maintain each asset together with the property it belongs to. By entering each property it's very easy to track for a future sale.
A self employment or other business activity where the rental of real estate property is not part of it, would be subject to self employment tax. Likewise if you grouped the real estate property with an active business the net profit would be subject to self employment tax.
A rental activity that is a building or home is not subject to self employment tax until and unless you become a real estate professional.
To be a real estate professional, a taxpayer must provide more than one-half of his or her total personal services in real property trades or businesses in which he or she materially participates and performs more than 750 hours of services during the tax year in real property trades or businesses.
[Edited: 2.13.2018 | 5:23 AM]
"Rental activities.
In general, you can’t group a rental activity with a trade or business activity. However, you can group them together if the activities form an appropriate economic unit and... "
That means I can group a rental activity with a business activity (non rental) if they are under the same economic unit? Both businesses are own by me.
@slickmoney Keep in mind that "passive income" (real property rentals) will be recharacterized as nonpassive and subject to self employment tax. The answer has been updated.
Thank you! How do group business and rental activity through TurboTax?
@slickmoney Report all on one business activity, self employment schedule C if there is any of this type of work and if not, one rental activity. Include a copy of the election statement with your return.