A Passive Activity Includes Any Rental Activity or Any Trade

question 92

True/False

A passive activity includes any rental activity or any trade or business in which the taxpayer does not materially participate.

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Definitions:

Par Value

Par value is the nominal or face value of a bond, share of stock, or coupon as stated by the issuer.

No-Par Common Stock

Shares issued without a par value, meaning their value is determined by the market rather than a set face value.

Stated Value

The nominal value assigned by the company to its no-par stock, which becomes the legal capital per share.

Credited

A journal entry that boosts a liability or equity account or reduces an asset or expense account.