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Within the context of the income tax laws, a criteria for determining the level of participation of an individual in a business and the consequential tax implications. If an individual materially participates, income or loss is "active" rather than "passive." In general, active losses can only be offset against active income, and passive losses can only be offset against passive gains.

Synonyms: materially participate
Synonyms list (a comma-separated list)
materially participate