Multimember LLC- Rental Investing Passive or Active?

[narendran-kandas]

First question- Because I'm manager for this LLC who makes all the decision, should I select actively involved in Form 1065? But below screen shot for this question tells all rental activities are passive. I am not real estate  professional.

Second question- my wife who is another member (not the manager) who also helps me with finding tenants, should I select actively involved in Form 1065?

Third question- Because it this LLC is pass thorugh entity, I pay taxes through personal return. While filling the personal return, Form 8582 also asks Rental Real Estate Activities With Active Participation. Should I answer this question as YES only if it is active participation  is selected in Form 1065?

[Carl]

Simple answer is, you are both actively involved.

[tagteam]

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@narendran-kandas wrote:

While filling the personal return, Form 8582 also asks Rental Real Estate Activities With Active Participation. 

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Again, the answer is "Yes" (based upon your set of facts) since active participation is a fairly easy standard to meet.

See https://www.irs.gov/publications/p925#en_US_2021_publink1000104573