I am a limited partner in the company where I work full time in a middle management role. (Or more specifically, I am a limited partner in the holding company that exists for the sole purpose of owning the company I work for.)
I understand I am allowed to deduct my portion of the partnership's losses on my personal income taxes if I "materially participated" in its activity.
Any work you do in connection with an activity in which you own an interest is treated as participation in the activity.
And, the first test for material participation:
You participated in the activity for more than 500 hours.
I certainly worked more than 500 hours, but it is unclear to me whether my day job is "work in connection with" whatever the parent holding company does, which I suppose is mostly administrative tasks done by one or two people.
My guess is that this case is somewhat open to interpretation, but it seems in the spirit of the guidelines to say I did materially participate in the partnership. Am I missing anything?