Nevada Revised Statutes Title 32. Revenue and Taxation § 363D.120. Businesses constituting passive entities

(a) The business is a limited-liability company, general partnership, limited-liability partnership, limited partnership or limited-liability limited partnership, or a trust, other than a business trust;

(b) During the period for which the gross revenue of the business entity is reported pursuant to NRS 363D.160, at least 90 percent of the business entity's federal gross income consists of the following income:

(c) The business entity does not receive more than 10 percent of its federal gross income from conducting an active trade or business.

(a) Rent; or

(b) Income received by a nonoperator from mineral properties under a joint operating agreement if the nonoperator is a member of an affiliated group and another member of that group is the operator under that joint operating agreement.

(a) Except as otherwise provided in this subsection, a business entity is “conducting an active trade or business” if:

(b) The ownership of a royalty interest or a nonoperating working interest in mineral rights does not constitute the conduct of an active trade or business.

(c) The payment of compensation to employees or independent contractors for financial or legal services reasonably necessary for the operation of a business does not constitute the conduct of an active trade or business.

(d) Holding a seat on the board of directors of a business entity does not by itself constitute the conduct of an active trade or business.

(e) Activities performed by a business entity include activities performed by persons outside the business entity, including independent contractors, to the extent that those persons perform services on behalf of the business entity and those services constitute all or any part of the business entity's trade or business.