Problem $5-25($LO$.7)$

Jesse, an engineer, operates a separate business that he acquired eight years ago. This year, he participates $85$ hours in the business and it incurs a loss of $$34,000.$

Based on each statement below, select either "Qualifies" or "Does not qualify" as circumstances necessary for Jesse to claim an active loss.

a$.$If the separate business has other employees and Jesse's participation is at least $50\%$ of the total hours, he is entitled to an active loss deduction.

QualifiesDoes not qualify

b$.$If Jesse is the only individual who participates in the separate business, he will be entitled to an active loss deduction.

QualifiesDoes not qualify

c$.$If the separate business has other employees, and the total hours of all significant participants equaled $550$ hours, he is entitled to an active loss deduction.

QualifiesDoes not qualify