Definition: A rental-property owner who meets the tax law's active-participation standard, which can include making meaningful management decisions and satisfying ownership requirements.
Example
An owner approves tenants, rental terms, and major expenditures rather than leaving every decision to others.
Keep the distinction clear
Active participation differs from material participation and does not automatically make rental income nonpassive. Any special rental-loss allowance has additional limits and phaseouts.
Related terms
Taxable Income · Tax Shelter · Property Management
Keep studying
References: IRS Publication 925: passive activity rules
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