Which of the following is not generally classified as a passive activity?
A)an activity in which the taxpayer does not materially participate
B)a limited partnership interest
C)rental real estate
D)a business in which the taxpayer owns an interest and works 1,000 hours a year

Question

Quizplus · Accepted Answer

Passive activities are those in which the taxpayer does not materially participate. Limited partnership interests and rental real estate are also generally classified as passive activities. However, if the taxpayer owns an interest in a business and works more than 500 hours per year in that business, that business is not considered a passive activity. Therefore, choice D is not generally classified as a passive activity.

Which of the Following Is Not Generally Classified as a Passive