S corp passive income or loss? - Spidell

S corp passive income or loss?

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Message Board S corp passive income or loss?

  • This topic has 2 replies, 2 voices, and was last updated 1 week ago by Alice Ma.
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    • #301783
      Alice Ma
      Participant
      • CA taxpayer owns 50% of a restaurant located in VI (the other member is also 50% owner)
      • No w2 for either owner
      • in 2020, the restaurant has a net loss.  CA owner has his k-1 showing his share of loss in box 1.

       

      1. How do we know if this is passive or non passive?

      2.  Do we have to use material participation rule, the 500 hours to determine if this is passive or non passive?

       

       

       

       

       

    • #301800
      Sandy Weiner
      Participant

      Yes you would use the material participation rules.

    • #301801
      Alice Ma
      Participant

      thank you Sandy!

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