@Ahnold
There has been (and still is) considerable disagreement (and confusion) with respect to the "7-days or less" rule. It has been interpreted (more likely misinterpreted) for a number of years.
Regardless, the rule appears to have been deleted from the most current Regulations and a memo was issued which indicates the rule is strictly for the purposes of Section 469.
See https://www.irs.gov/pub/irs-wd/202151005.pdf
Also, note that your interest in a business can be passive, but income reported on Schedule C is generally considered to be nonpassive by default (and subject to SE tax).
I will page @AmeliesUncle to see if he has anything to add.
