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  3. what is a passive activity? a. a passive activit

What is a passive activity? A. A passive activity is any trade or...

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Accounting

What is a passive activity?

A.

A passive activity is any trade or business in which the taxpayer does materially participate. A passive activity also includes any rental activity that is trade or business.

B.

A passive activity is any trade or business in which the taxpayer does materially participate. A passive activity also includes any rental activity that is not a trade or business.

C.

A passive activity is any trade or business in which the taxpayer does not materially participate. A passive activity also includes any rental activity that is not a trade or business.

D.

A passive activity is any trade or business in which the taxpayer does not materially participate. A passive activity also includes any rental activity that is trade or business.

b. Who is subject to the passive loss limitation rules?

A.

Closely held C corporations and personal service corporations are subject to the passive loss limitation rules.

B.

Individuals as well as certain publicly traded partnerships are subject to the passive loss limitation rules.

C.

Estates and trusts are subject to the passive loss limitation rules.

D.

All of the above.

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