Jerry is a limited partner in a partnership that owns an amusement park.Although he participates for more than 500 hours in the park's operations,he is not considered a material participant.

Question

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In order to be considered a material participant, an individual must participate for more than 500 hours and also meet at least one of seven material participation tests. Therefore, even if Jerry participates for more than 500 hours, the fact that he is not considered a material participant means that he is not actively involved in managing the partnership's operations.

Jerry Is a Limited Partner in a Partnership That Owns