Rental Activities

A rental activity is a passive activity even if the corporation materially participated in the activity unless it meets the requirements described in item 2 under Activities That Are Not Passive Activities, earlier. In addition, if the corporation meets any of the five exceptions listed later, the rental of the property is not treated as a rental activity. See Reporting Income, Deductions, Losses, and Credits From Rental Activities , later, if the corporation meets any of the exceptions.

An activity is a rental activity if tangible property (real or personal) is used by customers or held for use by customers and the gross income (or expected gross income) from the activity represents amounts paid (or to be paid) mainly for the use of the property. It does not matter whether the use of the property is under a

2 Instructions for Form 8810 (2025)

each trade or business activity in which the corporation did not materially participate. If, however, the corporation held the activity through a PTP or the activity is a significant participation activity, special rules apply. See Publicly Traded Partnerships (PTPs), later. See Significant Participation Passive Activities under Recharacterization of Passive Income in Pub. 925 for details about how to report income or losses from significant participation passive activities.

In general, if the corporation has credits from passive activities, use Worksheet 5 to figure the amount to enter in Part II of Form 8810. However, if the corporation held the activity through a PTP, special rules apply. See Credits From PTPs , later, for details about how to report credits from these activities.