Ned, a College Professor, Owns a Separate Business (Not Real

question 20

Multiple Choice

Ned, a college professor, owns a separate business (not real estate) in which he participates in the current year. He has one employee who works part-time in the business.

• A) If Ned participates for 120 hours and the employee participates for 120 hours during the year, Ned does not qualify as a material participant.
• B) If Ned participates for 95 hours and the employee participates for 5 hours during the year, Ned probably does not qualify as material participant.
• C) If Ned participates for 500 hours and the employee participates for 520 hours during the year, Ned qualifies as material participant.
• D) If Ned participates for 600 hours and the employee participates for 2,000 hours during the year, Ned qualifies as a material participant.
• E) None of the above.

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Definitions:

Task Significance

The degree to which a job has a substantial impact on the lives or work of other people within or outside the organization.

Performance Feedback

Information provided to individuals or groups regarding their performance or behavior with the intention to improve their effectiveness or efficiency.

Developmental Feedback

Constructive feedback provided to individuals to support their professional growth and development.

Subordinates' Behavior

The actions and interactions of employees directed by individuals in higher positions within the organizational hierarchy.