Lucy participates for 405 hours in Activity A and 101 hours in Activity B,both of which are nonrental businesses.Both activities are passive.

Question

Quizplus · Accepted Answer

Passive activities are those in which the taxpayer does not materially participate. However, rental activities are generally considered passive regardless of whether the taxpayer materially participates or not. Since it is stated that both activities are nonrental businesses, it is not clear whether Lucy materially participated or not, and therefore it cannot be determined whether they are passive or not.

Lucy Participates for 405 Hours in Activity a and 101