I need to choose three income streams that I currently have or will have in the future,
Question:
I need to choose three income streams that I currently have or will have in the future, and then classify them as active or passive according to the Internal Revenue Code. I am employed full-time and earn wages, I plan to continue this so I know this is active income. I also own a small farm in which I operate and file a schedule F and have material participation, so this is also active income.
I am stuck here... We renovated our one Barn and rented it out as a wedding venue, my husband offers catering services through his restaurant and I am not involved in that. I show the venue, book the weddings, handle the accounting, and sometimes decorate with items that can be included in the rental. We have booked an average of 25 weddings over the last year and on average 12 hours is involved for each event constituting 300 hours a year. 2023 was our first year in business and I am not sure the proper way to handle this.
Is this considered passive income because I am renting space and items to others?
the income is not more than 50% of my total income, but having 300 hours am I able to deduct any portion against my active income? Am I limited to the passive loss up to the amount of my passive income?
In a nut shell gross revenue was $75,000 total expenses including capitalizion/depreciation of the Barn, purchasing of furniture, decorations, advertising, general supplies, office supplies & equipment, and utilities was $62,000 for the first year.
A Concise Introduction to Logic
ISBN: 978-1305958098
13th edition
Authors: Patrick J. Hurley, Lori Watson