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    Passive activity definition

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    Which of the following is not generally classified as a passive activity?

    A. an activity in which the taxpayer does not materially participate
    B. a business in which the taxpayer owns an interest and works 1,000 hours a year
    C. a limited partnership interest
    D. rental real estate

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    Solution Preview

    B - passive activity includes any trade or business in which the taxpayer doesn't materially participate as well as any rental ...

    Solution Summary

    This solution provides the correct answer with explanation to the passive activity question presented. The conditions surrounding a passive activity are also explained, and the applicable tax code is referenced.