Jon is in the car rental business.Most of his customers rent cars on a daily basis.Jon's car rental business is considered a passive activity since rental activities are always treated as passive activities.

Question

Quizplus · Accepted Answer

Not all rental activities are considered passive. According to the IRS, rental activities are generally treated as passive activities regardless of the participant's participation, except when the taxpayer materially participates in the rental activity. If Jon materially participates in his car rental business, it would not be considered a passive activity.

Jon Is in the Car Rental Business