We actively manage our rental property but the software says that we did not actively manage it. The software says that we did not and our losses are being limited. Why?

Under your rental property Property Profile,

• Click Update to the right.
• Continue through several screens.
• At the screen You indicated you actively participate, did you click Yes, I am an active participant?

Does it say you did not actively participate, or does it say it is "passive"?  For tax purposes, those are NOT opposites.  You can be "active" and the rental is still "passive".

Is your total income over $100,000?  If so, that is why your losses are limited.  Rental property is still "passive" income even if you "actively participate".  And losses are limited for passive activities.

When working on each property when you get to the screen that asks you about your participation it does not give you the option of full time involvement so I check the "none of the above" box and this eliminates the passive status.

@EPR   Unless you are a Real Estate Professional, renting a real estate property *IS* passive (but renting land or a self-rental have some special rules in that regard).  If you are doing something to change that, you are doing something wrong.

Tax law specifies that all rental activities are passive activities, even if the landlord is a material participant, unless the taxpayer is a qualified real estate professional or the rental businesses are classified as active businesses by the tax code.

I am a real estate professional, general contractor, this is not a passive investment for me or my LLC.

Go back over your answers carefully. Make sure that you indicated that you are an RE professional.

@EPR