Question

Which of the following would not be classified as a material particiapant in an activity?
A. Short-term capital gains.
B. Charitable contributions.
C. MACRS depreciation expense.
D. Guaranteed payments.

Answer 1

Answer:

C. MACRS depreciation expense.

Explanation:

Material participation in an income-producing activity. That is, an activity that is regular, continuous, and substantial leading to income-producing actions, in which the taxpayer materially participates is an active income or loss.