Dena owns interests in five businesses and has full-time employees in each busin

Question

Dena owns interests in five businesses and has full-time employees in each business. She participates for 100 hours in Activity A, 120 hours in Activity B,130 hours in Activity C, 140 hours in Activity D, and 125 hours in Activity E a. Dena is a material participant with respect to all five activities. Ob. All five of Dena's activities are signinicant participation activities. Oc Dena is a material participant with respect to Activities B, C, D, and E od. Dena is not a material participant in any of the activites. e. None of these choices are correct

Explanation / Answer

answer will be (d) Dena is not a material participant in any activities.

As per US tax laws to You can claim to have materially participated in the operation of a trade or business activity by meeting one of seven following tests:
1. You work 500 hours or more in the activity during the year.
2. You do all, or nearly all, of the work in the activity.
3. You work more than 100 hours in the activity during the year, and no one else works more than you do.
4. The activity is a significant participation activity (SPA), and the sum of the SPAs in which you work 100–500 hours exceeds 500 hours for the year.
5. You materially participated in the activity in any 5 of the previous 10 years.
6. The activity is a personal service activity and you materially participated in that activity in any three prior years.
7. Based on all of the facts and circumstances of the cases.

Thus dena does not fill any conditions.

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