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Is real-estate rental a passive activity? Explain your answer and indicate an exception.

Is real-estate rental a passive activity? Explain your answer and indicate an exception.

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Answer #1

Explanation:

Generally real estate rental is a passive activity. Passive activity means where we do not have work regularly to earn it. We own property. We give it on rent. Now we do no have to do anything on it on day to day basis. Therefore it is passive income.

Exceptions:

Now if it my regular business to give it on rent. Then it is active income

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