Rental LLc Tax Question

In doing our personal taxes, I am not sure if of my wife (our) tax filing status: Passive v Non-Passive.

My wife, along with her siblings, take care of all maintenace issues. They may use a RE agent to find rental clients, but the family decides whom to rent. The LLc has an annual net loss of a few thousand $.

If my wife/ Iare subject to AMT taxes, will the tax benefits of the LLc be "removed".

Thanks for any/ all advise. -dave =============Residential rental real estate is always passive by definition.

What is "advise?" (noun)

Yet this is a textbook Material participation example, where merely being a person who can decide who the tenants will be is enough for material participation.

without commenting on OP's situation, residential rental real estate is not passive "always" or "by definition".

I believe what D. Stussy was saying is that the OP did not identify anyone as being a real estate professional and as such, rental real estate is by definition a passive activity. The code does list some exceptions, but that does not make the statement untrue. If you actively participate in the rental, then you may be allowed to deduct a loss but this does not change the definition of the activity from passive to active.

It is hard to tell what D. Stussy was saying if in fact he did not say it.

IRC 469 states that rental activity (not limited to residential property or nonresidential property) is NOT passive activity for a real estate professional. So it does change the definition from passive to active, not merely allow you to deduct a loss on a passive activity.

Isn't that what I just said?

.... the OP did not identify anyone as being a real estate professional and as such, rental real estate is by definition a passive activity.

Pico Rico says "IRC 469 states that rental activity (not limited to residential property or nonresidential property) is NOT passive activity for a real estate professional."

And that's not entirely accurate either. It depends on the extent of the taxpayer's participation in the activities.

The best thing to do - for this discussion - is to stipulate that none of the seven LLC member-owners is a "real estate professional".

And Arthur says "Yet this is a textbook Material participation example, where merely being a person who can decide who the tenants will be is enough for material participation," which is quite wrong, too.

I concur. However, with the ability to group activities, a Real Estate Professional has much latitude in meeting the material participation requirement.

I totally concur. First replies to OP were assuming facts not in evidence, failing to state those facts, and drawing conclusions thereon.