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Investors & landlords
Material participation in this context means participation on a “regular, continuous and substantial” basis. Unless you're a limited partner, you're deemed to materially participate in a business activity if you meet just one of seven tests:
- You participate in the activity at least 500 hours during the year.
- Your participation constitutes substantially all of the participation for the year by anyone, including nonowners.
- You participate more than 100 hours and as much or more than any other person.
- The activity is a “significant participation activity” — that is, you participate more than 100 hours — but you participate less than one or more other people yet your participation in all of your significant participation activities for the year totals more than 500 hours.
- You materially participated in the activity for any five of the preceding 10 tax years.
- The activity is a personal service activity in which you materially participated in any three previous tax years.
- Regardless of the number of hours, based on all the facts and circumstances, you participate in the activity on a regular, continuous and substantial basis.
June 1, 2019
12:50 PM