IRS Issues PLR Declassifying S Corporation Rental Income as Passive Investment Income

April 7, 2026, 2:56 PM UTC

The IRS has issued a private letter ruling on I.R.C. §1362 determining rental income received from properties is not passive investment income when the S corporation provides significant services through a management company and shareholders actively participate in property management and business operations. [PLR 202614002]

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