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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 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.

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

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