Open Access. Powered by Scholars. Published by Universities.®

Education Commons

Open Access. Powered by Scholars. Published by Universities.®

PDF

Book Gallery

Rural Tax Education

Activity loss

Articles 1 - 1 of 1

Full-Text Articles in Education

Materially Participate In The Business To Avoid The Passive Activity Loss Rules, Jc Hobbs Sep 2016

Materially Participate In The Business To Avoid The Passive Activity Loss Rules, Jc Hobbs

Rural Tax Education

Beginning farmers and ranchers frequently start their agricultural businesses by beginning small and keeping their day jobs. These new business activities must meet certain threshold tests to be considered active rather than passive activities. The passive activity loss rules apply to businesses including farms, limited partnerships, Limited Liability Companies (LLC’s), S Corporations, and C Corporations.

A passive activity is any activity that involves the conduct of a business in which the producer does not materially participate or a rental activity (whether or not the producer materially participates or not). Should a loss occur in such a business, the passive ...