We have a client who is a 10% S-Corp shareholder who participates materially, and owns a 50% stake in the real estate rented to the S-corp.
In regards to the Net Investment Income Tax, I know that the rental income from the self-rental is excluded specifically under Sec 1411 for landlords that participate materially in the business that is renting the property (in this case the S-corp), but is the only test material participation? Does it matter if the landlord is a 10%, 2%, or 1% shareholder of the S-corp?
Thank you in advance for your help!