In TurboTax Self-Employed, type in rentals in the search bar, hit enter, and click the Jump to link. This will take you to the Rents and Royalties section. Answer yes, then proceed through the questionnaire. The first questions refer to material participation which is more stringent than active participation. You can choose none of the above here; you don't need to be a real estate professional to have actively participated.
Click on Edit next to your rental property and then choose edit next to Property Profile. Proceed to the screens and you will come to the Active Participation questions.
Generally, the active participation rules allow those in a real estate activity to offset up to $25,000 of rental losses each year against non-passive sources. There are limitations, of course, and the key to qualifying is the requirement to "actively participate" in the rental activity.
In order to "actively participate" in a rental real estate activity, an individual must own at least 10% of the activity (including the spouse's interest) during the entire year.
Additionally, although there is no requirement that the individual be involved in the day-to-day operations, there must be significant participation when making management decisions, such as approving new tenants, deciding on rental terms, or arranging for others to provide services or repairs.
