Materially participate - You materially participated in a trade or business activity during the tax year if you meet any of the following tests:
You participated in the activity for more than 500 hours during the tax year.
Your participation in the activity for the tax year was substantially all of the participation in the activity of all individuals for the tax year.
You participated in the activity for more than 100 hours during the tax year, and you participated at least as much as any other person for the tax year.
The activity is a significant participation activity for the tax year, and you participated in all significant participation activities for more than 500 hours during the year. An activity is a "significant participation activity" if it involves the conduct of a trade or business, you participated in the activity for more than 100 hours during the tax year, and you did not materially participate under any of the other material participation tests.
You materially participated in the activity for any 5 of the prior 10 tax years.
The activity is a personal service activity in which you materially participated for any 3 prior tax years. A personal service activity is an activity that involves performing personal services in the fields of health, law, engineering, architecture, accounting, actuarial science, performing arts, consulting, or any other trade or business in which capital is not a material income-producing factor.
Based on all the facts and circumstances, you participated in the activity on a regular, continuous, and substantial basis during the tax year. But you do not meet this test if you participated in the activity for 100 hours or less during the tax year. Your participation in managing the activity does not count in determining if you meet this test if any person (except you) - (a) Received compensation for performing management services in connection with the activity, or (b) Spent more hours during the tax year than you spent performing management services in connection with the activity.
If you had income and deductions from an oil or gas well in which you own a working interest directly or through an entity that does not limit your liability.