1120-US: Renting to a nonpassive activity (FAQ)

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Question

How do I indicate in UltraTax/1120 I am renting to a nonpassive activity?

Answer

If there is a rental of property to a nonpassive activity, certain income may be recharacterized and excluded from passive activity income. Publication 925, Passive Activity and At-Risk Rules contain instructions on how to report income/loss from such activities.

To indicate the activity is to be recharacterized, enter X in the Subject to recharacterization rules checkbox in Screen Rent-2. UltraTax CS uses the recharacterization rules for the activity.

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