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One of the material participation tests is that 'Your participation was substantially all the participation in the activity of all individuals for the tax year, including the participation of individuals who didn’t own any interest in the activity.'
Even though there are several tests for material participation, you only have to meet one of those tests to qualify. When you consider that the question pertains to your personal Schedule C business as an independent contractor, then you would clearly qualify as materially participating in your Schedule C business because you are the one doing the work as the independent contractor. Unless you are not the one performing the work, then you can answer that yes, you materially participated.
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February 25, 2023
1:47 PM