Rental Owner shown as passive on CA 540

Rental properties are usually treated as passive activities (except those certain real estate professionals). You qualify as a real estate professional for the year if you meet both the following requirements

• More than half of the personal services you perform in all trades or businesses during the tax year are performed in real property trades or businesses in which you materially participate. 

• You perform more than 750 hours of services during the tax year in real property trades or businesses in which you materially participate.

You materially participated in an activity for the tax year if you were involved in its operations on a regular, continuous, and substantial basis during the tax year.

To enter as a real estate professional, follow these steps:

1. Open TurboTax.
2. “Pick up where I left off.”
3. Federal > Wages & Income > Rentals, Royalties, and Farm > Start or Revisit.

       4.  On the screen, “Your rentals and royalties summary,” Edit the Rental business.

       5.  Rental property info. > Edit.

           6.  Real estate Professional > Edit.

         7. Edit this screen.