Playing an Active Role in a business

[rgerson]

I am a physician who is not a hospital employee, but I work on a hospital committee monthly. There are 14 of us on  the committee. I get a check quarterly, which is labeled "Stipend." The stipend covers 2 hours for review of the materials and the meetings take 1.5 hours. We review documents/cases and make recommendations.  This year I got a 1099-NEC. In previous years it was a 1099-MISC. If I claim this on my Schedule C, do I play an active role in the "Business?"

Thanks for your help.

[Mike9241 · Accepted solution]

this is a passive activity since you don't meet the material participation rules for the "business". you would need to spend at least 500 hours a year to be materially participating.  have said that the next question is do you actively participate. the rules for this are much less stringent than for material participation.  the IRS says you may be treated as actively participating if you make management decisions in a significant and bona fide sense. since you participate in making recommendations that affect the hospital, I would conclude you actively participate. 

[rgerson]

Thank you very much for responding so quickly.