TaxGuyBill
Level 15

You need to remember that §469 is about Passive Activities, including passive businesses.  So yes, if BOTH are passive activities, yes, they could be grouped.

However, "runs his own law firm" seems quite unlikely to be passive.  Assuming that is the case, you can't group them.

 

Even if it were to be passive, it would not get the results you are wanting.  Actually, it would get the opposite of what you want. 

If they were both passive, you could already use the passive loss of the rental against the passive business income.  The purpose of the "grouping" is to achieve Material Participation, which would make the business NON-passive.

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