Randall Posted March 16, 2015 Report Share Posted March 16, 2015 Client is co-owner of rental on 1040 Sch E. Client also has LLC with rental activity (2 member LLC). Sch E rental shows loss but not deductible (8582) because of income level. LLC K-1 has rental income. I am preparing both the LLC return and the 1040. On the 1040 K-1 input, can I check both the 'active participating in rental' box and the 'passive activity' box? If I don't check 'passive activity', the LLC rental income won't offset the Sch E rental loss and the LLC income will carry to 1040 page one, while his Sch E loss is suspended. I was of the understanding that rental activity is considered passive (unless re pro). Quote Link to comment Share on other sites More sharing options...
Max W Posted March 16, 2015 Report Share Posted March 16, 2015 Yes. You can check both boxes, Active Participation & Passive Activity. From Pub 527 Active participation. You actively participated in a rental real estate activity if you (and your spouse) owned at least 10% of the rental property and you made management decisions or arranged for others to provide services (such as repairs) in a significant and bona fide sense. Management decisions that may count as active participation include approving new tenants, deciding on rental terms, approving expenditures, and other similar decisions. Quote Link to comment Share on other sites More sharing options...
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