That was not the treatment received at BofA.

I just want to put a note on here to clarify, When someone says LLC, they are note specifying the tax situation of the business.An LLC can be a:sole proprietor (all of his income is subject to SS and medicare up to the limits)Partnership: All passed through income is subject to SS and medicare unless limited partner who does not participateC-Corporation: corporation pays it own tax bill and S-Corporation Corporation must pay a reasonable Salary to officers(subject to SS and Medicare) and other income is passed through as ordinary income with no special treatment only subject to income taxBryan, Your dad will still receive his SS payments no matter what his income is.

@Sergiu Ionita  hopefully you lived in it long enough to get your tax free gain.. the absolute best tax treatment we have today

This includes partnerships and those electing S-Corp treatment, which are both disregarded entities for tax purposes.

If he's an equity partner, why should the treatment of his cash infusion be any different than yours? 

Our tenant, who is very clean, gets roaches now and then, so my husband who owns a pest control business does a free treatment for the residence next door as well.What others above said is accurate about tiny roaches versus the big ones.

Also, you can still qualify for the 25k active participation loss allowance on top of Non passive treatment of material participating rentals. 

There's are 6 factors meant to test the permanency of every asset, which are used to figure out if they qualify for short life treatment. 

Further, I realized how confusing the different terms are for the various types of income and their different tax treatments by the IRS. 

A close friend and I just had a discussion regarding the tax treatment of P&I.