A Taxpayer's Rental Activities Will Be Considered a Trade or Business

question 222

Multiple Choice

A taxpayer's rental activities will be considered a trade or business, rather than a passive activity, if

• A) more than half of the taxpayer's personal services performed in all business activities during the year are spent managing the rental properties.
• B) the taxpayer performs more than 500 hours of work during the year managing the rental properties.
• C) the taxpayer performs more than 750 hours of work during the year managing the rental properties.
• D) conditions A and C, but not B, are satisfied.

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Definitions:

Compact Disks

Optical storage media used to store data, including music and software, now largely superseded by digital formats.

Substitute

A product or service that can be used in place of another to satisfy consumer demand.

Quantity Supplied

The amount of a good or service that producers are willing to sell at a given price over a specified period.

Milk

A nutrient-rich liquid food produced by the mammary glands of mammals, widely consumed by humans.