Complete the statements below regarding why some rental activities may not be treated as such under the passive activity loss rules. Some rental activities are not treated as such for purposes of the passive activity loss rules. One exception is when property is rented for days or less. This exception is based on the presumption that a person who rents property for this period is generally to provide significant services to the customer. The fact that a business is not treated as a rental activity due to the required exception does not necessarily mean that it is classified as a nonpassive activity. Therefore, if the taxpayer is a material participant, ; ir he is not a material participant, it is treated as a passive the business is treated as active activity.

Complete the statements below regarding why some rental activities may not be treated as such under the passive activity loss rules. Some rental activities are not treated as such for purposes of the passive activity loss rules. One exception is when property is rented for days or less. This exception is based on the presumption that a person who rents property for this period is generally to provide significant services to the customer. The fact that a business is not treated as a rental activity due to the required exception does not necessarily mean that it is classified as a nonpassive activity. Therefore, if the taxpayer is a material participant, ; ir he is not a material participant, it is treated as a passive the business is treated as active activity.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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