What do I have to show in order to take nonpassive losses in real estate?

What do I have to show in order to take nonpassive losses in real estate?

You are required to actively participate in the ongoing operation of your rental property. That means you make your decisions directly, picking tenants and monitoring the properties, performing maintenance or hiring repair services, and being in control of the major aspects of being invested in real estate. If you turn over your rental properties to a management company and don't take any part in management, your passive losses could be jeopardized because you would not be "materially participating" in managing your investment.