1. Identify Taxpayer

2. Identify Activity

3. What is a "passive activity"?

4. Does taxpayer materially participate?

YES
NO

5. What are the passive loss rules?

6. Excep-tions to passive loss treatment:
(a) Real property trade or business
(b) Active Involvement in real estate rental

7. Relation between "passive loss" rules and "at-risk" rules