Jed spends 32 hours a week, 50 weeks a year, operating a bicycle rental store that he owns at a resort community. He also owns a music store in another city that is operated by a full-time employee.He elects not to group them together as a single activity under the "appropriate economic unit" standard.Jed spends 40 hours per year working at the music store.

Question

Quizplus · Accepted Answer

Jed materially participates in the bicycle rental store by spending 32 hours a week, which is more than 500 hours a year, thus it is not a passive activity. However, he only spends 40 hours per year on the music store, which does not meet the material participation requirement, making it a passive activity.

Jed Spends 32 Hours a Week, 50 Weeks a Year