What are passive activities and how are they defined in Form 8582?
Passive activities, as defined in Form 8582, are activities in which the taxpayer does not materially participate. Material participation is defined as being involved in the operations of the activity on a regular, continuous, and substantial basis. Rental activities are generally considered passive activities, unless the taxpayer materially participates in them. Other types of passive activities include businesses in which the taxpayer does not actively participate, such as limited partnerships and S corporations.