Tenants in common - who can claim active participation?
A family (parent and children) owns rental properties as tenants in common. Each co-owner has more than a 10% stake in the properties. One co-owner does 99% of the property management. However, when it comes time to approving rental applications, making decisions on capital improvements, etc., all co-owners are consulted before a decision is made. Can all family members claim active participation in this passive activity?
I have read what the IRS says about Passive Activity in Publication 925, where it says:
Active participation is a less stringent standard than material participation. For example, you may be treated as actively participating if you make management decisions in a significant and bona fide sense. Management decisions that count as active participation include approving new tenants, deciding on rental terms, approving expenditures, and similar decisions.
I'm just still unsure about whether all co-owners in my example qualify.