Hi all, and thank you for your help.

My question is regarding the Section 469 Activity Grouping Disclosure under Treas. Reg. §1.469-4.

I would like to know: When I file Form 1040 and Form 1120-S for my client—who owns an S corporation operating a transportation business and also owns the building where the business operates—how can I inform the IRS that the rental income is non-passive?

Also, what should I do on Schedule E of Form 1040, given that the property owner is the individual taxpayer?