Rene owns four small businesses.Rene spends the following number of hours this year working in those businesses: Business A,105 hours; Business B,130 hours; Business C,120 hours; Business D,99 hours.Which of the following statements is correct?
A) Businesses A,B,and C are material participation activities.
B) Businesses A,B,C,and D are all significant participation activities.
C) Businesses A,B,and C are significant participation activities.
D) Both Businesses A,B,and C are material participation activities and Businesses A,B,and C are significant participation activities are correct.

Question

Quizplus · Accepted Answer

A significant participation activity is one in which the taxpayer spends more than 100 hours but less than 500 hours. Businesses A, B, and C meet this criterion, while Business D does not. Material participation generally requires more than 500 hours, which none of the businesses meet.

Rene Owns Four Small Businesses