[{"data":1,"prerenderedAt":7},["ShallowReactive",2],{"faq-standard-1138":3},{"rec_id":4,"title":5,"text":6},"1138","What is a passive activity?","In simple terms, a passive activity is a business activity you're a part of, but didn't have significant involvement in. The IRS has specific rules to determine if you have significant involvement, and they refer to it as \u003Ca href=\"/freefile2025/answers?faq=1135\">material participation\u003C/a>. If you do NOT materially participate in a business activity as defined by the IRS, then it's considered passive.\n\u003Cbr>\u003Cbr>\nMost rental income is considered passive, although there's an exception for \u003Ca href=\"/freefile2025/answers?faq=1146\">real estate professionals\u003C/a> allowing their rental income to be considered \u003Ca href=\"/freefile2025/answers?faq=12060\">nonpassive\u003C/a>.",1777391534445]