Examples of Income that is NOT Passive - John R. Dundon II, Enrolled Agent
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Examples of Income that is NOT Passive

Examples of Income that is NOT Passive

  • Rental Income from a building leased to a business where the tax payer works – Reg 1.469-2(f)(6)

  • Rental income from leased land – Reg. 1.469-2T(f)(3)

  • Income from land, a building or other property held for investment IRC 469(e)(1)(A)(ii)(II)

  • Gains on stocks or bonds – IRC 469(e)(1)(A)(ii)(II)

  • Royalties – IRC 469(e), Reg 1.469-2T(c)(3)(i)(A)

  • Covenant Not to Compete – Reg. 1.469-2c)(3)(i)(A)

  • Guaranteed Payment from Partnership (K-1 line 4) regardless if tax payer materially participated – Reg 1.469-2(e)(2)(ii)

  • Income from business if taxpayer materially participated in any 5 of the past 10 years – Reg. 1.469-5T(a)(5)

  • Income from a personal service activity if tax payer participated in any of the past 3 years – Reg 1.469-5T(a)(6)

  • Any activitiy in which the spouse materially participated – IRC 469(h)(5)

  • K-1, Line 1 income from a partnership which is considered a trader in stocks and bonds – Reg 1.469-1T(e)(6)

  • Income from an activity whcih is in the business of lending money, financing – Reg 1.469-2T(f)(4)

  • Patents, Copyrights, literary, musical or artistic composition or any other single intangible if tax payer’s personal services contributed to the creation – Reg 1.469-2T(c)(7)

  • Stock Exchange seats – not tangible property – IRC 469(j)(8), Reg. 1.469-2T(f)(3)

John R. Dundon, EA – 720-234-1177 – jddundon@comcast.net – http://prep.1040.com/jd/ – Defend Yourself Against the IRS – Enrolled with the United States Department of Treasury to Practice before the IRS – Enrolled Agent # 85353. Under contract with the IRS as a Certified Individual Taxpayer Identification Number (ITIN) Acceptance Agent – I am a Federally Authorized Tax Practitioner (USC 31 Section 330 + IRC 7525a.3.A) regulated under US Treasury Cir. 230.