Active participation

Active participation is a level of involvement in a rental property that allows the landlord to deduct up to $25,000 per year in losses from rental activity. A person classified as being an active participant should be at least a 10% owner who also makes significant decisions relating to the management of the property, such as the selection of tenants, setting rental terms, and deciding which capital improvements to make. Limited partners are not considered to actively participate in a rental property.

Related Courses

Real Estate Taxation Problems