A bill to amend the Internal Revenue Code of 1986 to provide that the passive loss limitations will not apply to deductions and credits attributable to rental real estate activities of a taxpayer who is primarily engaged in real estate trade or business actvities.

Amends Internal Revenue Code accounting provisions to revise the definition of "passive activity" to exclude the rental real estate activity of any individual: (1) whose work time is at least 50 percent devoted to real estate trade or business activities; and (2) whose average earned income for the three preceding taxable years is at least 50 percent attributable to such activities.