Which of the following is NOT a criterion for determining material participation?

Material participation is a key concept in tax law that helps determine whether an individual is actively involved in a business activity to a significant extent. This classification affects how income or losses from a business may be reported on tax returns.

The criterion of participating less than any other individual does not align with the concept of material participation. For an individual to meet the threshold for material participation, they typically need to engage in the activity at least as much as any other individual involved in the business. If someone participates less than others, it suggests they are not materially participating in the activity.

In contrast, the other criteria—participating for a significant number of hours, being involved regularly throughout the year, and participating on a substantial basis—align with the standards set by the IRS for assessing material participation. Each of these points reflects a deeper level of involvement that indicates the individual has a substantial, regular role in the business activity, which is crucial for tax reporting purposes.