Per Diem Rates from the U.S. General Services Administration
Search by city, state or ZIP code, or by clicking on the map. You can also use the new per diem tool to calculate trip allowances
Rates are set by fiscal year, effective October 1 each year. Find current rates in the continental United States ("CONUS Rates").
Who Do Passive Activity Rules Apply To?
Here's how section 469(c) of the Internal Revenue Code defines a passive activity:
In general - The term "passive activity" means any activity which involves the conduct of any trade or business, and in which the taxpayer does not materially participate.
Passive activity rules apply to:
- Individuals
- Estates
- Trusts (other than grantor trusts)
- Personal service corporations, and
- Closely held corporations.
Investors
Work you do in your capacity as an investor does not constitute participation unless you are directly involved in the day-to-day management or operations of the activity. For example, the following work by an investor does not constitute participation:
- Studying or reviewing financial statements or reports on the operations of the activity
- Preparing summaries or analyses of the finances of the operations for your own use
- Monitoring the finances or operations in a nonmanagerial capacity
Purpose of Passive Activity Rules
The passive activity rules are designed to prevent passive activity losses from being deducted from a taxpayers nonpassive income, such as wages (earned income), interest and dividends (portfolio income). In addition, passive activity credits may only be deducted from the tax on passive activity income. Passive activity credits include the general business credit and other special business credits, such as the credit for fuel produced from a nonconventional source.
What is a Passive Activity?
There are two kinds of passive activities:
- Trade or business activities in which you do not materially participate during the year.
- Rental activities, even if you do materially participate in them, unless you are a real estate professional.
Exception for Real Estate Nonprofessionals
Although rental activities are always considered passive activities (except for real estate professionals), a special rule allows real estate nonprofessionals to classify up to $25,000 of rental losses as nonpassive, which means you get to deduct up to $25,000 of rental losses from your nonpassive income, such as wages from a job, interest and dividends. But, you must actively participate in the activity to get this deduction, which means, participating in the management of the rental property, such as approving leases and prospecive tenants, and approving maintenance and repairs expeses, etc. You may also deduct the cost of using a professional property management company.
Tax Forms You May Need to File
The following tax forms apply to passive activity loss limitations and passive activity credit limitations:
- Form 8582, Passive Activity Loss Limitations
- Form 8582-CR, Passive Activity Credit Limitations