Material participation standards for shareholders of Subchapter S corporations, who are individuals, include those who during the tax year __________. (A) participated in the activity for more than 80 hours during the tax year.(B) constituted at least one half of all the participation in the activity of all individuals ( including non-owners).(C) participated in all significant participation activities including activities outside the corporation for more than 200 hours).(D) participated in business activities for more than 100 hours during the tax year and the participation was not less than the activity of any other individual`s during the tax year.

The correct answer is letter "D": participated in business activities for more than 100 hours during the tax year and the participation was not less than the activity of any other individual's during the tax year.

Explanation:

Material Participation Tests are principles the Internal Revenue Service (IRS) considers at the moment of qualifying an individual as being part of an income-producing activity. There are seven (7) tests taken into consideration by the IRS but only one requirement is necessary for qualification. Among them, test three (3) states that an individual qualifies if that person was involved for more than 100 hours and not less than any other individual in the firm.