Brian and his father-in-law formed Southern Sands Golf Club LLC.It is a daily fee course (not a private club).They advertise it as "your country club for a day." The activity would be considered a rental activity and automatically passive since they are renting the course for use of their patrons.

Question

Quizplus · Accepted Answer

The activity would not be considered a rental activity and automatically passive because the IRS generally does not treat businesses that provide significant services in addition to the use of the property, such as a daily fee golf course offering services like golf cart rentals, caddies, and golf lessons, as rental activities. These are considered active business operations, not passive rental activities.

Brian and His Father-In-Law Formed Southern Sands Golf Club LLC