NC non passive business income?

[Super Mom]

Was thinking, the non-passive income for business deduction on NC this year, is rental income in this if it's non passive?

[Super Mom]

Ok, studying IRC section 469 and she meets the 750 hour test and she has a real estate liscence. But she did work another job, how do I figure the 1/2 of personal services performed? Is it based on income from the rentals as at leat half of W-2 income? Or is time somehow calculated? Still researching, does anyone just know right off?

[FEDUKE404]

Possible answer

Best I could (quickly) come up with.

See #12.

http://www.dornc.com/taxes/individual/netbusdeduction_faq.html

[Super Mom]

Ok these people meet the non passive rules in the schedule E instructions, however that says nothing about irc 469, however the NC DOR says they base on US Treasury regulation AND IRC 469, so thinking if they meet the IRS rules for non passive, can deduct on NC? Has anyone tried this with a schedule E?

[Super Mom]

Is schedule E considered business income? She does NOT have a real estate liscence anymore.

[Super Mom]

Is schedule E considered business income? She does NOT have a real estate liscence anymore.

Let me clarify, this Sch E is rental income, not Partnership income.

[Super Mom]

I think I've found my answer, without a liscence the deduction won't fly per the NCDOR directive on the deductions.

[Burke]

A real estate professional as defined by the IRS and the 750-hr rule does not have to have a real estate license in order to qualify for that designation. Many people meet this definition who do not sell real estate. NC may be different, not sure why that would be a stipulation.