What his feature does: Use of an aggregation code allows passive rent & royalty activities entered on worksheets for Rent/Royalty and Passthroughs to be "grouped together" (aggregated) and treated as a single unit for the purpose of applying the passive activity loss rules on Form 8582.

Required entries:

1. Choose one of the activities in question to be considered the "main" activity. Does not matter which one.
• Note: The Aggregation Code should be blank on the main activity.
2. Enter a code designating the main activity into the Aggregation Code box of each of the other activities to be included in the group. The Aggregation Code consists of a prefix ("R" if the main activity is on an Rent/Royalty or "K" if the main activity is a passthrough) followed by the activity number of the main activity.
• For example, to aggregate with a main activity that is S Corp entity 3, the Aggregation Code for every member of the group, other than the main activity, would be "K3". If the main activity is Rental entity 2, the Aggregation code for all the other activities in the group would be "R2".

Notes:

• Only passive activities (including active rental real estate) and materially participating real estate professional activities may be aggregated.
• Non-passive activities may not be aggregated.
• Every activity to be included in the group must have the same Classification Code (or Activity Code) type, as well as the same TSJ coding and FS & State coding.

Limitations: The Aggregation Code applies to the passive activity loss rules (Form 8582) only. Tax does not aggregate for the at-risk rules. Each activity stands on its own merits for At-Risk.

Flows to: Results can be seen on the statements behind Form 8582.