taxpayer has bona fide involvement and has a 10% or greater ownership interest throughout the year, regardless of the form of ownership. Any trade or business activity in which a taxpayer participates for more than 100 hours, but does not meet any material participation tests.

taxpayer has bona fide involvement and has a 10% or greater ownership interest throughout the year, regardless of the form of ownership. Any trade or business activity in which a taxpayer participates for more than 100 hours, but does not meet any material participation tests.

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter8: Depreciation, Cost Recovery, Amortization, And Depletion

Section: Chapter Questions

Problem 55P

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Concept explainers

Fringe Benefit Tax

Fringe benefits are in addition to the compensation that companies give to their employees. It is an additional benefit above the stated salary. It helps to keep the employees of the firm motivated as sometimes the only salary is not enough to retain the quality employees of the firm. There are different types of fringe benefits. Fringe benefits are given in both private as well as public enterprises.

Question

A significant participation activity can be defined
as:
Any trade or business activity in which a
taxpayer materially participates.
Any rental real estate activity in which the
taxpayer has bona fide involvement and has a
10% or greater ownership interest throughout
the year, regardless of the form of ownership.
Any trade or business activity in which a
taxpayer participates for more than 100 hours,
but does not meet any material participation
tests.
Any trade or business activity in which a
taxpayer participates for more than 500 hours,
but does not materially participate.

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