Which of the following would not be classified as a material participant in an activity?
A) An individual who participates in an activity for more than 500 hours a year.
B) An individual who participated in the activity for at least one of the preceding five taxable years.
C) An individual who participates in an activity regularly, continuously, and substantially.
D) An individual who participates more than 100 hours a year and the person's participation is not less than any other individual's participation.

Question

Quizplus · Accepted Answer

A material participant is someone who is actively involved in an activity on a regular, continuous, and substantial basis. Options A, C, and D all describe individuals who would be considered material participants. Option B, however, only requires participation in one of the preceding five taxable years and does not specify the level or frequency of participation, so it would not be sufficient to classify someone as a material participant.

Which of the Following Would Not Be Classified as a Material