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Article #: 10113
Why Note 357 regarding the Schedule E is produced on the return
This note is produced when either 5 Land or 7 Self-Rental is selected as the type of property on the E screen.
Neither activity is considered passive according to IRC Regulation 1.469-2T(f)(3). Therefore, the software has reclassified these as non-passive and the gain will not flow to Form 8582.