Gloria owns and works full-time at a shop that rents watercraft of various types to tourists who are vacationing at the beach.If she generates a loss from that activity, the loss is subject to the passive activity loss rules because it is rental property.

Question

Quizplus · Accepted Answer

The loss from the activity is not subject to the passive activity loss rules because Gloria materially participates in the business, making it a non-passive activity despite it involving rental property.

Gloria Owns and Works Full-Time at a Shop That Rents