Jay and Tina , a married couple with three income producing properties in port Jarvis, filed taxes last year and recorded $140,000 in modified adjusted gross income. They regularly use the services of migrant workers to help keep the properties maintained, but actively participate in all other phases of rental activity, including collection of income on a weekly basis. in terms of the rules pertaining to rental real estate activity.

a. they are disqualified under PAL rules because of activities incidental to non-rental activity

b. Jay and tina are not entitled to losses from all activities related to the three properties.

c. Jay and tina do qualify for some loss deductions under the passive activity rules.

d. unless the amount of material and active participation in the running of all three properties is lessened, they will not be eligible for passive loss deductions applied against other income

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