I have a partnership client owned by 3 brothers, 2 of them work for the corporation that rents from the partnership.
According to 1.469-2, property rented to a corporation owned by the taxpayers in which taxpayer is a member, is subject to the self rental rules.
1. Would the 3rd brother not be considered under the self rental rules, making this income passive to him?
2. Also, the partnership rents approximately 85% of the building to this commonly owned corporation, would they call this all active income or do I need to do a percentage?
Thanks so much for any guidance!