Paula Owns Four Separate Activities

question 33

Multiple Choice

Paula owns four separate activities. She elects not to group them together as a single activity under the "appropriate economic unit" standard. Paula participates for 130 hours in Activity A, 115 hours in Activity B, 260 hours in Activity C, and 100 hours in Activity D. She has one employee, who works 125 hours in Activity D. Which of the following statements is correct?

• A) Activities A, B, C, and D are all significant participation activities.
• B) Paula is a material participant with respect to Activities A, B, C, and D.
• C) Paula is not a material participant with respect to Activities A, B, C, and D.
• D) Losses from all of the activities can be used to offset Paula's active income.
• E) None of the above.

---

Definitions:

Problem Solving

The process of finding solutions to difficult or complex issues through a systematic approach that involves creativity and reasoning.

Operant Conditioning

A method of teaching in which behavior is changed by the use of incentives or disciplinary actions.

Classical Conditioning

An instructional approach where repetitively linking two stimuli causes a reaction, at first prompted by the second stimulus, to be elicited by the first stimulus over time.

Imprinting

A form of learning occurring at a particular life stage that is rapid and apparently independent of the outcomes of behavior.