Question

Which taxpayer would not be considered a material participant of an activity?

A. taxpayer materially participated in the activity for any five of the preceding ten years
B. taxpayer participated on a regular, continuous, and substantial basis last year
C. taxpayer participated 95 hours last year and participation is not less than any other participants for the year
D. taxpayer participated in the activity for 995 hours last year
E. None of these

Answer 1

Based on the IRS criteria for material participation, none of the taxpayers described would be excluded from being considered material participants, as they all meet at least one of the requirements laid out by the IRS.

Step-by-step explanation:

A taxpayer would not be considered a material participant in an activity if their involvement does not meet certain criteria established by the IRS for material participation. The options provided refer to different criteria under the IRS guidelines. According to these guidelines:

• A. A taxpayer who materially participated in the activity for any five of the preceding ten years would be considered materially participating.
• B. A taxpayer who participated on a regular, continuous, and substantial basis last year would also meet the material participation standards.
• C. A taxpayer who participated 95 hours last year and where their participation is not less than any other participants for the year would also meet the standard for material participation.
• D. If a taxpayer participated in the activity for 995 hours last year, they would typically be considered a material participant.

Thus, based on the information provided and the IRS standards, none of these taxpayers would be excluded from being considered material participants of an activity. Every option listed fits within the IRS criteria for material participation.