Rental Activities
Special Rules for Rental Property
Rental real estate is generally considered a passive activity even if the taxpayer participates in management. However, the Internal Revenue Code provides certain exceptions for qualifying taxpayers.
- Rental income classification.
- Passive loss limitations.
- Special rules for qualifying real estate activities.
- Disposition of passive activities.
Note
The treatment of rental real estate is frequently tested because it differs from many other business activities.
Summary
Rental activities generally follow special passive activity rules with limited exceptions.