The IRS defines passive activities as any business in which the taxpayer doesn't materially participate or any rental activity. It specifically excludes portfolio and investment income from the ...

In a 2014 case, 1 the U.S. Tax Court ruled that in some instances a trust can “materially participate” in a trade or business, thus avoiding the “passive activity loss rules” which generally apply to ...

The Tax Court held that a surgeon properly classified as passive his income from a limited liability company (LLC) interest in an outpatient surgery center. Facts: The taxpayer, Stephen Hardy, was a ...

Real estate professional status can provide relief from the Passive Activity Loss Limitation rules and the 3.8% Net Income Investment Tax (“NIIT”), resulting in significant tax savings. Rental ...

Aircraft ownership losses are frequently categorized as "passive activity losses" by the IRS, preventing them from offsetting active income (like salaries) unless the owner meets strict material ...