HI Tax Guy Bill,

Thanks for responding.  I did have the boxes checked for active and material participation.  I think it was due to the clients wages (375K).  I removed the wages and the loss was allowed.  Put the wages back in, and no loss allowed.  Form 8582, line 5 shows any income greater than $150,000 will make the rental loss disallowed.

Thanks again.

The Tent Man