{"id":76706,"date":"2025-11-01T13:37:48","date_gmt":"2025-11-01T13:37:48","guid":{"rendered":"https:\/\/wcginc.com\/?post_type=epkb_post_type_3&#038;p=76706"},"modified":"2026-01-27T08:20:10","modified_gmt":"2026-01-27T08:20:10","slug":"the-overlooked-spa-material-participation-test","status":"publish","type":"epkb_post_type_3","link":"https:\/\/wcginc.com\/kb-rental-property\/the-overlooked-spa-material-participation-test\/","title":{"rendered":"The Overlooked SPA Material Participation Test"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 ez-toc-wrap-right counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table Of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/wcginc.com\/kb-rental-property\/the-overlooked-spa-material-participation-test\/#Key_Takeaways\" >Key Takeaways<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/wcginc.com\/kb-rental-property\/the-overlooked-spa-material-participation-test\/#The_SPA_Test_in_Plain_English\" >The SPA Test in Plain English<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/wcginc.com\/kb-rental-property\/the-overlooked-spa-material-participation-test\/#Why_the_SPA_Test_Exists\" >Why the SPA Test Exists<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/wcginc.com\/kb-rental-property\/the-overlooked-spa-material-participation-test\/#SPA_Basics\" >SPA Basics<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/wcginc.com\/kb-rental-property\/the-overlooked-spa-material-participation-test\/#When_Others_Participate\" >When Others Participate<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/wcginc.com\/kb-rental-property\/the-overlooked-spa-material-participation-test\/#Why_Bother_With_SPA_If_I_Already_Qualify\" >Why Bother With SPA If I Already Qualify<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/wcginc.com\/kb-rental-property\/the-overlooked-spa-material-participation-test\/#When_The_SPA_Stinks_or_cant_be_used\" >When The SPA Stinks (or can\u2019t be used)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/wcginc.com\/kb-rental-property\/the-overlooked-spa-material-participation-test\/#Qualifying_The_Activity_As_A_SPA\" >Qualifying The Activity As A SPA<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/wcginc.com\/kb-rental-property\/the-overlooked-spa-material-participation-test\/#What_About_W-2_Jobs\" >What About W-2 Jobs?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/wcginc.com\/kb-rental-property\/the-overlooked-spa-material-participation-test\/#The_Tax_Courts_Track_Record\" >The Tax Court\u2019s Track Record<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/wcginc.com\/kb-rental-property\/the-overlooked-spa-material-participation-test\/#Grouping_Still_Matters_Just_Differently\" >Grouping Still Matters, Just Differently<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/wcginc.com\/kb-rental-property\/the-overlooked-spa-material-participation-test\/#Real_Estate_Professional_Status_Overlay\" >Real Estate Professional Status Overlay<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/wcginc.com\/kb-rental-property\/the-overlooked-spa-material-participation-test\/#Final_Thoughts_Sitting_In_The_SPA\" >Final Thoughts Sitting In The SPA<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/wcginc.com\/kb-rental-property\/the-overlooked-spa-material-participation-test\/#I_Just_Got_A_Rental_What_Do_I_Do_2026_Edition\" >I Just Got A Rental, What Do I Do? 2026 Edition<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/wcginc.com\/kb-rental-property\/the-overlooked-spa-material-participation-test\/#Rental_Expert_Pod_the_REP\" >Rental Expert Pod (the REP)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/wcginc.com\/kb-rental-property\/the-overlooked-spa-material-participation-test\/#Talk_to_a_Real_Estate_CPA_About_Your_Rental_Property\" >Talk to a Real Estate CPA About Your Rental Property<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/wcginc.com\/kb-rental-property\/the-overlooked-spa-material-participation-test\/#Schedule_Discovery_Meeting_Now\" >Schedule Discovery Meeting Now<\/a><\/li><\/ul><\/nav><\/div>\n<div class=\"wpb-content-wrapper\"><p>[vc_row][vc_column][vc_column_text css=&#8221;&#8221; woodmart_inline=&#8221;no&#8221; text_larger=&#8221;no&#8221;]<img decoding=\"async\" class=\"overview-img alignright wp-image-76718 size-full\" title=\"Significant Participation Activity\" src=\"https:\/\/wcginc.com\/wp-content\/uploads\/076706_2170768895_spa_material_participation_300.jpg\" alt=\"Significant Participation Activity\" width=\"300\" height=\"200\" \/>By <strong>Jason Watson, CPA<\/strong><br \/>\nPosted Saturday, November 1, 2025<\/p>\n<div class=\"overview\">\n<h2><span class=\"ez-toc-section\" id=\"Key_Takeaways\"><\/span>Key Takeaways<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<ul>\n<li><strong>SPA is the middle lane.<\/strong> The Significant Participation Activity test lives between the hobbyist and the full-timer- over 100 hours, under 500, and not already material by another test.<\/li>\n<li><strong>Aggregation without grouping frustration.<\/strong> SPA lets you add up multiple mid-level activities without invoking the sticky 1.469-4 grouping election.<\/li>\n<li><strong>Your hours, not theirs.<\/strong> SPA only counts your own participation; you can forget about tracking cleaners, contractors, or anyone else\u2019s time. Wait, what?<\/li>\n<li><strong>When more work hurts you.<\/strong> If you do substantially all the work in an activity, it\u2019s already material and drops out of SPA territory. The irony: the harder you work, the less SPA helps.<\/li>\n<li><strong>The paperwork payoff.<\/strong> SPA might require 500 total hours, but it often saves time and audit grief- less math on others\u2019 hours, fewer grouping traps, and cleaner support if you\u2019re ever challenged.<\/li>\n<\/ul>\n<\/div>\n<p>Most rental property owners, and even a fair number of real estate CPAs, see material participation as a three-way game between-<\/p>\n<ul>\n<li>500 hours,<\/li>\n<li>100 hours and no one did more than you, or<\/li>\n<li>Substantially all hours.<\/li>\n<\/ul>\n<p>We do too and it is peppered throughout our book. This trinity covers 95% of the material participation options. But\u2026<\/p>\n<p>Often overlooked is the Significant Participation Activity (SPA) test, found in Treasury Regulations Section 1.469-5T(a)(4). We will call this the \u201cSPA test\u201d since it sounds fun and rolls off the tongue- everyone also likes a good spa, right? We can also call this threshold or test #4 since it is fourth on the list of seven. The SPA test is halfway down the list, and conveniently also the middle lane or blended material participation test.<\/p>\n<p>In a nutshell, the SPA test rewards people who genuinely work in multiple ventures, and at times without the laborious time tracking of others or the worry that someone is spending more time than you. Yay!<\/p>\n<h2><span class=\"ez-toc-section\" id=\"The_SPA_Test_in_Plain_English\"><\/span>The SPA Test in Plain English<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Here\u2019s the regulation verbatim-<\/p>\n<p class=\"legalbs\">(4) The activity is a significant participation activity (within the meaning of paragraph (c) of this section) for the taxable year, and the individual\u2019s aggregate participation in all significant participation activities during such year exceeds 500 hours.<\/p>\n<p>And paragraph (c) of Treasury Regulations Section 1.469-5T(c) defines what significant participation means with-<\/p>\n<div class=\"legalbs\">\n<p>(1) For purposes of this section, an activity is a significant participation activity (a \u201cSPA\u201d, emphasis added) of an individual if and only if-<\/p>\n<p>(ii) Such activity would be an activity in which the individual does not materially participate for the taxable year if material participation for such year were determined without regard to paragraph (a)(4) of this section.<\/p>\n<\/div>\n<p>Tilt, right?<\/p>\n<p>In other words, a SPA lives in the sweet spot- more than 100 hours, less than 500, and not already material by some other test. Cross 100 hours, clear 500 hours in the aggregate, and you\u2019re in business on getting those pesky passive losses to become active and therefore deductible against your high W-2 income or other income.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Why_the_SPA_Test_Exists\"><\/span>Why the SPA Test Exists<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>When legislators wrote IRC Section 469, they wanted to prevent passive investors from sheltering income, sure, but they also did not want to punish working owners who happen to spread their time across several smaller activities. How nice, right? Without this material participation provision, someone running four real businesses, each at 150 hours a year, could lose valuable tax deductions simply because of diversification. The SPA test fixes that inequity when your facts line up just right.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"SPA_Basics\"><\/span>SPA Basics<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Let\u2019s say you run three ventures: a craft business (110 hours), a tutoring side gig (160 hours), and a self-managed short-term rental cabin (250 hours). No activity hits 500 hours, but all exceed 100 and your total is 520 hours.<\/p>\n<p>Under <a href=\"https:\/\/www.law.cornell.edu\/cfr\/text\/26\/1.469-5T\" target=\"_blank\" rel=\"noopener\">Treasury Regulations Section 1.469-5T(a)(4)<\/a>, you materially participate in aggregate without the grouping election (which has its limitations), no paperwork, no heroic hour-padding (you wouldn\u2019t dare), etc. Just genuine, hands-on time across several active pursuits.<\/p>\n<p style=\"padding-left: 40px;\"><strong><span style=\"color: #ab9157;\">Sidebar:<\/span> <\/strong>To group activities under Treasury Regulations Section 1.469-4, an appropriate economic unit meet a facts-and-circumstances test considering factors like similarity of business type, common control and ownership, geographic location, and interdependencies. Right off the bat, grouping a rental property with a tutoring side gig fails the \u201csimilarity of business type\u201d criterion, and perhaps others.<\/p>\n<p>Who wants a cheesy tagline? SPA test is aggregation without grouping frustration. There are some devils in the details, so read on!<\/p>\n<h2><span class=\"ez-toc-section\" id=\"When_Others_Participate\"><\/span>When Others Participate<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Now let\u2019s complicate your rental activity. Like most short-term rental property owner who have a lot going on, you hire a cleaner after each guest stay. Moreover, they spend more time on the rental than you do. Does that ruin your material-participation claim? No.<\/p>\n<p>The SPA test counts only your hours; it doesn\u2019t subtract or offset anyone else\u2019s. The cleaners, handyman or lawn crew\u2019s time neither helps nor hurts. The only requirement is that you exceed 100 hours for the rental activity and your aggregate SPA total exceeds 500 hours. Yay, right?<\/p>\n<p>That distinction matters. Other material participation tests, such as \u201cno one else did more\u201d or \u201csubstantially all,\u201d explicitly compare your hours to everyone else\u2019s. The SPA test does not. As long as you personally coordinate bookings, guest communication, repairs, and maintenance decisions, you are the operator with continuous and regular managerial involvement.<\/p>\n<p style=\"padding-left: 40px;\"><strong><span style=\"color: #ab9157;\">Sidebar:<\/span><\/strong> Does this mean you can skip recording a time log? Nope. You must still support and defend the 100 hours of participation with specifics on what you did. The silver lining is that you don\u2019t have to track other people\u2019s time which you typically must do in the \u201c100 hours and no one did more than me\u201d material participation test. Test #3 if you are counting.<\/p>\n<p>Here is a table to visualize this-<\/p>\n<table style=\"width: 60%;\">\n<tbody>\n<tr>\n<td style=\"text-align: left;\"><strong>Material Participation Test<\/strong><\/td>\n<td style=\"text-align: center;\"><strong>Track Others&#8217; Hours<\/strong><\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: left;\">1. 500-hour<\/td>\n<td style=\"text-align: center;\">No<\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: left;\">2. Substantially all<\/td>\n<td style=\"text-align: center;\">Yes<\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: left;\">3. 100-hour, and no one more<\/td>\n<td style=\"text-align: center;\">Yes<\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: left;\">4. SPA<\/td>\n<td style=\"text-align: center;\">No<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h2><span class=\"ez-toc-section\" id=\"Why_Bother_With_SPA_If_I_Already_Qualify\"><\/span>Why Bother With SPA If I Already Qualify<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>You might be asking- if I have two rental properties where I already participate at least 100 hours each and no one participated more than me, why do I need to aggregate under SPA? Don\u2019t I already qualify as materially participating? The short answer, Yes, but the SPA test can still make your life easier. Under SPA, you don\u2019t have to track or defend other people\u2019s hours, only your own as we\u2019ve shown above. Sure, the aggregate threshold is higher at 500 hours, but it\u2019s often less paperwork, fewer gray areas, and a cleaner audit defense.<\/p>\n<p>But here\u2019s where SPA really helps. Let\u2019s say you have 4 rentals where you spend 126 hours participating in their operations. However, in 3 of the rentals, others spend way more time than you such as 150 hours compared to your 126 hours. You could elect to group them under 1.469-4 and hit the grand-daddy threshold of 500 hours, but with SPA you don\u2019t have to worry about the pitfalls with the grouping election, and you also don\u2019t have to worry about other hours exceeding yours. Also, you might not be eligible for grouping since there are rules associated with the election.<\/p>\n<p>Want another example? You still have 4 rental properties but each of your rentals has others who spend more time than you. However, when you aggregate them with your side hustle, where you have a very active partner, the SPA test works. You\u2019re active enough to matter even if others rack up more time on individual properties. Here is a table to illustrate-<\/p>\n<table style=\"width: 60%;\">\n<tbody>\n<tr>\n<td style=\"text-align: left;\"><\/td>\n<td style=\"text-align: center;\"><strong>You<\/strong><\/td>\n<td style=\"text-align: center;\"><strong>Others<\/strong><\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: left;\">Rental 1<\/td>\n<td style=\"text-align: center;\">100<\/td>\n<td style=\"text-align: center;\">150<\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: left;\">Rental 2<\/td>\n<td style=\"text-align: center;\">100<\/td>\n<td style=\"text-align: center;\">150<\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: left;\">Rental 3<\/td>\n<td style=\"text-align: center;\">100<\/td>\n<td style=\"text-align: center;\">150<\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: left;\">Partnership Business<\/td>\n<td style=\"text-align: center;\">201<\/td>\n<td style=\"text-align: center;\">250<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>Separately, none of these activities would be considered material participation and you cannot elect to formally group them since they are disparate in business entity and management \/ operations. This is where SPA comes in. Sure, narrow example, but it underscores the usefulness with your unique set of facts.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"When_The_SPA_Stinks_or_cant_be_used\"><\/span>When The SPA Stinks (or can\u2019t be used)<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Let\u2019s say you log 150 hours in a consulting side gig, 340 hours managing an eBay resale project, and another 80 hours tutoring. Only the consulting and eBay gigs qualify as SPAs (over 100 hours). As such, the total hours are only 150+340 or 490 hours, just a bit shy of the 500 hours needed. This was the very problem in <a title=\"Brumbaugh vs. Commissioner\" href=\"https:\/\/wcginc.com\/wp-content\/documents\/taxcourt\/Brumbaugh.v.Commissioner.pdf\" target=\"_blank\" rel=\"noopener\">Brumbaugh v. Commissioner, T.C. Memo. 2018-40<\/a>. The taxpayer claimed hundreds of hours in an aircraft LLC but couldn\u2019t show the 500-hour aggregate across multiple SPAs. The Court summarized simply-<\/p>\n<blockquote><p>Petitioner has not shown that his aggregate participation in all significant participation activities during such year exceeds 500 hours. See sec. 1.469-5T(a)(4), Temporary Income Tax Regs., 53 Fed. Reg. 5725 (Feb. 25, 1988). In sum, petitioner has failed to meet his burden of proving that he \u2018materially participated\u2019 in N444SS during 2007.<\/p><\/blockquote>\n<p>The SPA test is a three-part test (the regulations say it is a two-prong test, but we want to tease out a subtle annoyance). First, the activity must qualify as a significant participation activity, which we will discuss in detail in a bit. From there, you need 100 hours in each activity for it to invited to the SPA aggregation party, and then the aggregated hours must exceed 500 hours across all eligible SPAs. Who doesn\u2019t like party with a spa?<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Qualifying_The_Activity_As_A_SPA\"><\/span>Qualifying The Activity As A SPA<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Another subtle trap. Correction- the trap is not so subtle, but the application is. Here we go- once an activity already meets a different material participation test, it cannot be a SPA in the same year. Huh? <a href=\"https:\/\/www.irs.gov\/pub\/irs-wd\/202229036.pdf\" target=\"_blank\" rel=\"noopener\">Technical Advice Memorandum 202229036<\/a> reads in part-<\/p>\n<blockquote><p>Section 1.469-5T(c)(1)(ii) provides that an activity is a significant participation activity only if the activity would be an activity in which the individual does not materially participate for the taxable year if material participation for such year were determined without regard to paragraph (a)(4) of this section.<\/p><\/blockquote>\n<p>Did that help? Probably not. Here it is in plain English- if an activity qualifies for material participation under another test, it cannot be considered a SPA activity for the 100-hour and 500-hour aggregate tests. What\u2019s the big deal?<\/p>\n<p>The 100 hours and no one did more than me and the substantially all hours tests are easy to trip, and therefore those activities become ineligible for the SPA test.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"What_About_W-2_Jobs\"><\/span>What About W-2 Jobs?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Taxpayers often ask whether a W-2 job counts toward SPA hours, or worse, whether it ruins the test. The answer is easier than it looks. A W-2 job isn\u2019t even in the IRC Section 469 world (no party invite). <a href=\"https:\/\/www.law.cornell.edu\/uscode\/text\/26\/469\" target=\"_blank\" rel=\"noopener\">Section 469(c)(6)<\/a> reads-<\/p>\n<p class=\"legalbs\">The term \u2018passive activity\u2019 does not include any activity performed as an employee.<\/p>\n<p>That one line takes employment completely off the board. You can\u2019t include your day job hours in the SPA total, which seems obvious, but those hours can\u2019t disqualify you either.<\/p>\n<p>The only time a W-2 job matters is for <a title=\"Real Estate Professional Status (REPS\" href=\"https:\/\/wcginc.com\/kb-rental-property\/real-estate-professional-status-reps\/\">real estate-professional status (REPS)<\/a>, where you must spend more than half your personal service time in real property trades or businesses. Those 2,080 W-2 hours make REPS qualification difficult (which is to say impossible) but they don\u2019t touch SPA eligibility.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"The_Tax_Courts_Track_Record\"><\/span>The Tax Court\u2019s Track Record<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Few cases address SPA directly, but the ones that do show its boundaries clearly.<\/p>\n<p>In Padda v. Commissioner, T.C. Memo. 2020-154, a physician with ownership in five restaurants and a brewery logged more than 100 hours in each and \u201cwell over 500 hours\u201d total. The Court believed his testimony and travel records, holding he materially participated via the SPA test even without grouping the entities. This is Mia\u2019s spiritual twin case: multiple mid-level ventures, credible documentation, no single 500-hour monster in the SPA gaggle.<\/p>\n<p>In Scheiner v. Commissioner, T.C. Memo. 1996-554, the Court described a SPA as an activity in which the taxpayer \u201cparticipated for more than 100 hours during the tax year, with the level of participation not qualifying as material.\u201d That simple sentence has anchored a lot of other discussions and court decisions. In other words, the quote is saying that while your participation is not material as defined elsewhere, it certainly is significant and cannot be ignored when aggregating under the SPA test.<\/p>\n<p>Scheiner is one of those fundamental underpinnings to SPA considerations.<\/p>\n<p>In Gregg v. United States, 186 F. Supp. 2d 1123, the district court noted that once an activity already satisfies the 500-hour material participation test, it can\u2019t also qualify as a SPA for that same year (which we already discussed, but wanted to drive home the point). That activity stands on its own as \u201cmaterial,\u201d and the SPA test simply doesn\u2019t apply.<\/p>\n<p>Together, these authorities sketch a neat box-<\/p>\n<ul>\n<li>under 100 hours, too small<\/li>\n<li>100 to 499 hours, SPA territory<\/li>\n<li>500+ hours, already material and excluded from SPA aggregation.<\/li>\n<\/ul>\n<p>This is sort of a goldilocks situation. Too soft, too hard, just right.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Grouping_Still_Matters_Just_Differently\"><\/span>Grouping Still Matters, Just Differently<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><a href=\"https:\/\/www.law.cornell.edu\/cfr\/text\/26\/1.469-4\" target=\"_blank\" rel=\"noopener\">Treasury Regulations Section 1.469-4<\/a> allows taxpayers to group several activities into one \u201cappropriate economic unit\u201d as we side barred previously. That can help when operations truly function as a single business or activity and you are trying to support material participation across them all. However, this election comes with baggage. Once grouped, always grouped, unless facts materially change. That can be problematic in certain circumstances.<\/p>\n<p>The SPA rule, by contrast, requires no election. You can keep your activities separate for tax reporting yet still aggregate your hours informally for the 500-hour SPA threshold. That flexibility can be helpful for real estate investors or rental property owners with a gaggle of unrelated ventures that don\u2019t meet the \u201cappropriate economic unit\u201d standard or want to be boxed in with the 1.469-4 election.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Real_Estate_Professional_Status_Overlay\"><\/span>Real Estate Professional Status Overlay<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>If you qualify as a real estate professional, the SPA test can help determine final leg which is material participation within your rentals. This is especially helpful if you have several smaller properties where each one alone doesn\u2019t meet the other material participation thresholds. For example-<\/p>\n<ul>\n<li>You spend 750 hours or more on real estate activities,<\/li>\n<li>More than half of your personal service time is spent on your rental properties (not including short-term rentals, which are not \u201crental activities\u201d under IRC Section 469 but rather businesses, like a hotel), and<\/li>\n<li>You have four long-term rentals, each requiring about 150 hours of your time (over 100 hours but less than 500 hours).<\/li>\n<\/ul>\n<p>In this case, you can apply the SPA test across those rental properties to establish material participation without using the 1.469-9(g) election (which is unique to REPS and separate from the 1.469-4 grouping election).<\/p>\n<p>If you have made the 1.469-9(g) election to treat all rentals as one activity, you then test that single grouped activity under the standard material participation rules such as the 500-hour, 100-hour and no else did more or substantially all hours tests. The SPA test itself becomes irrelevant because SPA requires multiple distinct activities to aggregate; once they\u2019re grouped, you have just one activity. In other words, you need at least two activities to have a SPA discussion (and at least two people to have a spa party).<\/p>\n<p>Could you instead group your long-term rentals under 1.469-4, and then combine that now single activity with your short-term rentals under the SPA test? Theoretically you could, but in practice it rarely works. Once an activity, even a grouped one, meets a material participation test, it is already material and no longer eligible for SPA treatment.<\/p>\n<p>Quick sidebar-<\/p>\n<p><a title=\"Regulations 1.469-9(g) Election\" href=\"https:\/\/wcginc.com\/kb-rental-property\/regulations-1-469-9g-election\/\">1.469-4 The \u201cEconomic Unit\u201d Grouping<\/a>. Let\u2019s you combine multiple businesses or rentals into one activity if they form an appropriate economic unit based on common ownership, control, geography, or interdependence. It\u2019s available to anyone and applies to both rentals and trades or businesses.<\/p>\n<p><a title=\"Regulations 1.469-4 Election\" href=\"https:\/\/wcginc.com\/kb-rental-property\/regulations-1-469-4-election\/\">1.469-9(g) The Real Estate-Professional Election.<\/a> Exclusive to real-estate professionals under IRC Section 469(c)(7). It allows all rental real-estate interests to be treated as a single activity solely for material-participation testing. It doesn\u2019t depend on economic factors. Keep in mind that short-term rentals are not rental real estate interests.<\/p>\n<p>We discuss <a title=\"Regulations 1.469-9(g) Election\" href=\"https:\/\/wcginc.com\/kb-rental-property\/regulations-1-469-9g-election\/\">grouping elections in deeper detail in later sections<\/a>.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Final_Thoughts_Sitting_In_The_SPA\"><\/span>Final Thoughts Sitting In The SPA<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>For taxpayers with multiple mid-size ventures or activities, the SPA test can be a practical material-participation entry point if you want to reduce paperwork and time tracking of others. So, if you can say, \u201cI\u2019m busy everywhere but not full-time anywhere,\u201d the SPA test might prove useful. Sure, it might not blow your hair back either since you might materially participate in using the 100 hours test- however, and it bears repeating, if you spend 100 hours per activity and others do spend more time than you, then SPA is your friend.<\/p>\n<p>In summary, two reasons to use the significant participation activity (SPA) test-<\/p>\n<ul>\n<li>You don\u2019t want to track other people\u2019s time, or<\/li>\n<li>You cannot formally group activities because they are ineligible to be grouped, and they separately don\u2019t qualify for material participation, or<\/li>\n<li>You have several activities where others spend time than you (think 4 rentals plus side gig where others are blowing up your material participation with their hours).<\/li>\n<\/ul>\n<p>Yes, these are narrow reasons. Yes, this is a lot reading to get through. Yes, you are better for it.[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_empty_space height=&#8221;25px&#8221;][vc_column_text css=&#8221;&#8221;]<style data-type=\"vc_shortcodes-custom-css\">#wd-69d2f9fcf009f .info-box-title{line-height:40px;font-size:30px;color:#473d3c;}#wd-69d2f9fcf009f .info-box-inner{line-height:26px;font-size:16px;color:#473d3c;}#wd-69d3e2e584de8 .info-box-title{line-height:40px;font-size:30px;color:#473d3c;}#wd-69d3e2e584de8 .info-box-inner{line-height:26px;font-size:16px;color:#473d3c;}#wd-68e97e561482c .info-box-title{line-height:40px;font-size:30px;color:#473d3c;}#wd-68e97e561482c .info-box-inner{line-height:26px;font-size:16px;color:#473d3c;}#wd-68460abfbd4d1 .info-box-title{line-height:60px;font-size:50px;color:#473d3c;}#wd-68460abfbd4d1 .info-box-inner{line-height:26px;font-size:16px;color:#473d3c;}#wd-6880833b7bd6b .info-box-title{line-height:26px;font-size:16px;color:#473d3c;}#wd-6880833b7bd6b .info-box-inner{line-height:22px;font-size:12px;color:#473d3c;}#wd-6880834fd8436 .info-box-title{line-height:26px;font-size:16px;color:#473d3c;}#wd-6880834fd8436 .info-box-inner{line-height:22px;font-size:12px;color:#473d3c;}#wd-6880835d3a0fb .info-box-title{line-height:26px;font-size:16px;color:#473d3c;}#wd-6880835d3a0fb .info-box-inner{line-height:22px;font-size:12px;color:#473d3c;}#wd-68bcf7fc8516a .info-box-title{line-height:40px;font-size:30px;color:#473d3c;}#wd-68bcf7fc8516a .info-box-inner{line-height:26px;font-size:16px;color:#473d3c;}#wd-68bcfc71da664 .info-box-title{line-height:46px;font-size:36px;color:#473d3c;}#wd-68bcfc71da664 .info-box-inner{line-height:26px;font-size:16px;color:#473d3c;}@media (max-width: 1199px) {#wd-69d2f9fcf009f .info-box-title{line-height:34px;font-size:24px;}#wd-69d2f9fcf009f .info-box-inner{line-height:24px;font-size:14px;}#wd-69d3e2e584de8 .info-box-title{line-height:34px;font-size:24px;}#wd-69d3e2e584de8 .info-box-inner{line-height:24px;font-size:14px;}#wd-68e97e561482c .info-box-title{line-height:34px;font-size:24px;}#wd-68e97e561482c .info-box-inner{line-height:24px;font-size:14px;}#wd-68460abfbd4d1 .info-box-title{line-height:50px;font-size:40px;}#wd-6880833b7bd6b .info-box-title{line-height:25px;font-size:15px;}#wd-6880834fd8436 .info-box-title{line-height:25px;font-size:15px;}#wd-6880835d3a0fb .info-box-title{line-height:25px;font-size:15px;}#wd-68bcf7fc8516a .info-box-title{line-height:34px;font-size:24px;}#wd-68bcf7fc8516a .info-box-inner{line-height:24px;font-size:14px;}#wd-68bcfc71da664 .info-box-title{line-height:36px;font-size:26px;}#wd-68bcfc71da664 .info-box-inner{line-height:24px;font-size:14px;}}@media (max-width: 767px) {#wd-69d2f9fcf009f .info-box-title{line-height:28px;font-size:18px;}#wd-69d2f9fcf009f .info-box-inner{line-height:24px;font-size:14px;}#wd-69d3e2e584de8 .info-box-title{line-height:28px;font-size:18px;}#wd-69d3e2e584de8 .info-box-inner{line-height:24px;font-size:14px;}#wd-68e97e561482c .info-box-title{line-height:28px;font-size:18px;}#wd-68e97e561482c .info-box-inner{line-height:24px;font-size:14px;}#wd-68460abfbd4d1 .info-box-title{line-height:40px;font-size:30px;}#wd-6880833b7bd6b .info-box-title{line-height:24px;font-size:14px;}#wd-6880834fd8436 .info-box-title{line-height:24px;font-size:14px;}#wd-6880835d3a0fb .info-box-title{line-height:24px;font-size:14px;}#wd-68bcf7fc8516a .info-box-title{line-height:28px;font-size:18px;}#wd-68bcf7fc8516a .info-box-inner{line-height:24px;font-size:14px;}#wd-68bcfc71da664 .info-box-title{line-height:28px;font-size:18px;}#wd-68bcfc71da664 .info-box-inner{line-height:24px;font-size:14px;}}<\/style><div class=\"wpb-content-wrapper\">[vc_row][vc_column]\t\t\t<div class=\"info-box-wrapper\">\n\t\t\t\t<div id=\"wd-69d2f9fcf009f\" class=\" wd-rs-69d2f9fcf009f wd-info-box wd-wpb text-center box-icon-align-top box-style- color-scheme- wd-bg-none border-btm-title kb \">\n\t\t\t\t\t\t\t\t\t\t<div class=\"info-box-content\">\n\t\t\t\t\t\t\t\t\t\t\t\t<div class=\"info-box-inner reset-last-child\"><p style=\"text-align: center;\"><em>Jason Watson, CPA, is a partner and the CEO of <strong>WCG CPAs &amp; Advisors,<\/strong> a boutique yet progressive tax, accounting and <\/em><em>rental property consultation and real estate CPA firm with over 90 team members and 7 partners headquartered in Colorado serving real estate investors worldwide.<\/em><\/p>\n<div style=\"display: flex; justify-content: center;\"><a href=\"https:\/\/www.linkedin.com\/in\/jason-watson-cpa\/\"><img decoding=\"async\" class=\"alignnone wp-image-17327 entered lazyloaded\" style=\"height: 35px!important; width: auto!important;\" src=\"https:\/\/wcginc.com\/wp-content\/uploads\/linkedin-150x150-1.png.webp\" alt=\"Jason Watson CPA LinkedIn\" \/><\/a>\u00a0\u00a0\u00a0\u00a0\u00a0<a href=\"mailto:jason@wcginc.com\"><img decoding=\"async\" class=\"alignnone size-thumbnail wp-image-17334 entered lazyloaded\" style=\"height: 35px!important; width: auto!important;\" src=\"https:\/\/wcginc.com\/wp-content\/uploads\/mail-150x150-1.png.webp\" alt=\"Jason Watson CPA Email\" \/><\/a><\/div>\n<\/div>\n\n\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\n\t\t\t\t\t<style><\/style>\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t[\/vc_column][\/vc_row][vc_row][vc_column]\t\t\t<div class=\"info-box-wrapper\">\n\t\t\t\t<div id=\"wd-69d3e2e584de8\" class=\" wd-rs-69d3e2e584de8 wd-info-box wd-wpb text-left box-icon-align-top box-style- color-scheme- wd-bg-none border-btm-title img-right kb \">\n\t\t\t\t\t\t\t\t\t\t<div class=\"info-box-content\">\n\t\t\t\t\t\t<h2 class=\"info-box-title title wd-font-weight-800 box-title-style-default font-primary wd-fontsize-m\"><span class=\"ez-toc-section\" id=\"I_Just_Got_A_Rental_What_Do_I_Do_2026_Edition\"><\/span>I Just Got A Rental, What Do I Do? 2026 Edition<span class=\"ez-toc-section-end\"><\/span><\/h2>\t\t\t\t\t\t<div class=\"info-box-inner reset-last-child\"><p><img decoding=\"async\" class=\"alignright wp-image-100749 size-full\" src=\"https:\/\/wcginc.com\/wp-content\/uploads\/Web-and-Social-GFX-2026_300.jpg\" alt=\"\" width=\"300\" height=\"360\" \/>This KB article is an excerpt from our 530+ page book (yeah, thick, there are some picture pages, but no scratch and sniff) which was <span style=\"color: #ff0000;\"><strong>updated April 5, 2026<\/strong><\/span>, and is available in paperback from <a href=\"https:\/\/wcginc.com\/amazon-rental\" target=\"_blank\" rel=\"noopener\">Amazon<\/a>, as an eBook for\u00a0<a href=\"https:\/\/wcginc.com\/kindle-rental\" target=\"_blank\" rel=\"noopener\">Kindle<\/a>\u00a0and as a\u00a0<a href=\"https:\/\/wcginc.com\/pdf-rental\" target=\"_blank\" rel=\"noopener\">PDF<\/a>\u00a0from ClickBank. We used to publish with iTunes and Nook, but keeping up with two different formats was brutal. You can cruise through these KB articles online, click on the fancy buttons below or\u00a0<a href=\"\/business-services\/book\/\" target=\"_blank\" rel=\"noopener\">visit our webpage<\/a>\u00a0which provides more information.<\/p>\n<table class=\"purchase-table\">\n<tbody>\n<tr>\n<td style=\"text-align: center;\"><a href=\"\/amazon-rental\" target=\"_blank\" rel=\"noopener\"><img decoding=\"async\" class=\"alignnone size-full wp-image-6657 aligncenter\" style=\"float: none;\" src=\"https:\/\/wcginc.com\/wp-content\/uploads\/amazon-imageresized.png.webp\" alt=\"I Just Got A Rental, What Do I Do? 2025 Edition | Amazon version\" width=\"50\" height=\"50\" \/><\/a><\/td>\n<td style=\"text-align: center;\"><a href=\"\/kindle-rental\" target=\"_blank\" rel=\"noopener\"><img decoding=\"async\" class=\"alignnone size-full wp-image-6658\" style=\"float: none;\" src=\"https:\/\/wcginc.com\/wp-content\/uploads\/kindle-imageresized.png.webp\" alt=\"I Just Got A Rental, What Do I Do? 2025 Edition | Kindle Version\" width=\"50\" height=\"50\" \/><\/a><\/td>\n<td style=\"text-align: center;\"><a href=\"\/pdf-rental\" target=\"_blank\" rel=\"noopener\"><img decoding=\"async\" class=\"alignnone size-full wp-image-6659 aligncenter\" style=\"float: none;\" src=\"https:\/\/wcginc.com\/wp-content\/uploads\/PDFresized.png.webp\" alt=\"I Just Got A Rental, What Do I Do? 2025 Edition | PDF version\" width=\"50\" height=\"50\" \/><\/a><\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: center;\"><strong>$32.95<\/strong><\/td>\n<td style=\"text-align: center;\"><strong>$21.95<\/strong><\/td>\n<td style=\"text-align: center;\"><strong>$18.95<\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n\n\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\n\t\t\t\t\t<style><\/style>\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t[\/vc_column][\/vc_row][vc_row][vc_column]\t\t\t<div class=\"info-box-wrapper\">\n\t\t\t\t<div id=\"wd-68e97e561482c\" class=\" wd-rs-68e97e561482c wd-info-box wd-wpb text-left box-icon-align-top box-style- color-scheme- wd-bg-none border-btm-title img-right kb \">\n\t\t\t\t\t\t\t\t\t\t<div class=\"info-box-content\">\n\t\t\t\t\t\t<h2 class=\"info-box-title title wd-font-weight-800 box-title-style-default font-primary wd-fontsize-m\"><span class=\"ez-toc-section\" id=\"Rental_Expert_Pod_the_REP\"><\/span>Rental Expert Pod (the REP)<span class=\"ez-toc-section-end\"><\/span><\/h2>\t\t\t\t\t\t<div class=\"info-box-inner reset-last-child\"><p>WCG's tax team structure is built around Pods \u2014 small, agile groups of tax professionals (4-6 total) who embrace team camaraderie while achieving client intimacy. Each Pod is led by a seasoned tax manager or partner, and together they make up the core of our tax return preparation.<\/p>\n<p>For the 2026 tax season, we\u2019re thrilled to introduce the <a href=\"https:\/\/wcginc.com\/blog\/rental-expert-pod\/\" target=\"_blank\" rel=\"noopener\">Rental Expert Pod<\/a> or REP for short. This is WCG\u2019s dedicated team of real estate CPAs and rental property tax specialists focused on optimizing your tax position, ensuring compliance, and helping you build long-term wealth through smart real estate strategies. [<a href=\"https:\/\/wcginc.com\/blog\/rental-expert-pod\/\" target=\"_blank\" rel=\"noopener\">Learn More<\/a>]<\/p>\n<\/div>\n\n\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\n\t\t\t\t\t<style><\/style>\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t[\/vc_column][\/vc_row][vc_row equal_height=\"yes\" content_placement=\"top\" el_id=\"consultation-secc\" woodmart_css_id=\"6756f7d427735\" responsive_spacing=\"eyJwYXJhbV90eXBlIjoid29vZG1hcnRfcmVzcG9uc2l2ZV9zcGFjaW5nIiwic2VsZWN0b3JfaWQiOiI2NzU2ZjdkNDI3NzM1Iiwic2hvcnRjb2RlIjoidmNfcm93IiwiZGF0YSI6eyJ0YWJsZXQiOnt9LCJtb2JpbGUiOnt9fX0=\" mobile_bg_img_hidden=\"no\" tablet_bg_img_hidden=\"no\" woodmart_parallax=\"0\" woodmart_gradient_switch=\"no\" woodmart_box_shadow=\"no\" wd_z_index=\"no\" woodmart_disable_overflow=\"0\" row_reverse_mobile=\"0\" row_reverse_tablet=\"0\" el_class=\"kb-consult\"][vc_column]\t\t\t<div class=\"info-box-wrapper\">\n\t\t\t\t<div id=\"wd-68460c6336e7f\" class=\" wd-rs-68460c6336e7f wd-info-box wd-wpb text-left box-icon-align-top box-style- color-scheme- wd-bg-none border-btm-title kb-fix \">\n\t\t\t\t\t\t\t\t\t\t<div class=\"info-box-content\">\n\t\t\t\t\t\t<h2 class=\"info-box-title title box-title-style-default wd-fontsize-m\"><span class=\"ez-toc-section\" id=\"Talk_to_a_Real_Estate_CPA_About_Your_Rental_Property\"><\/span>Talk to a Real Estate CPA About Your Rental Property<span class=\"ez-toc-section-end\"><\/span><\/h2>\t\t\t\t\t\t<div class=\"info-box-inner reset-last-child\"><p>Please use the form below to tell us a little about yourself, and what you have going on with your investments and wealth-building objectives. <strong>WCG CPAs &amp; Advisors<\/strong> are real estate CPAs, tax strategists and rental property consultants, and we look forward to talking to you!<\/p>\n<\/div>\n\n\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\n\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t[vc_row_inner el_id=\"consultation-inner\" woodmart_css_id=\"66fd6caf92fc0\" responsive_spacing=\"eyJwYXJhbV90eXBlIjoid29vZG1hcnRfcmVzcG9uc2l2ZV9zcGFjaW5nIiwic2VsZWN0b3JfaWQiOiI2NmZkNmNhZjkyZmMwIiwic2hvcnRjb2RlIjoidmNfcm93X2lubmVyIiwiZGF0YSI6eyJ0YWJsZXQiOnt9LCJtb2JpbGUiOnt9fX0=\" mobile_bg_img_hidden=\"no\" tablet_bg_img_hidden=\"no\" woodmart_parallax=\"0\" woodmart_gradient_switch=\"no\" woodmart_box_shadow=\"no\" wd_z_index=\"no\" woodmart_disable_overflow=\"0\" row_reverse_mobile=\"0\" row_reverse_tablet=\"0\"][vc_column_inner][vc_raw_js el_class=\"defaultBot\"]JTNDc2NyaXB0JTIwdHlwZSUzRCUyMnRleHQlMkZqYXZhc2NyaXB0JTIyJTIwc3JjJTNEJTIyaHR0cHMlM0ElMkYlMkZ3Y2dpbmMuam90Zm9ybS5jb20lMkZqc2Zvcm0lMkYyNTE2NjU1MjUzNjk5NzElMjIlM0UlM0MlMkZzY3JpcHQlM0UlMEE=[\/vc_raw_js][\/vc_column_inner][\/vc_row_inner]\t\t\t<div class=\"info-box-wrapper\">\n\t\t\t\t<div id=\"wd-68460abfbd4d1\" class=\" wd-rs-68460abfbd4d1 wd-info-box wd-wpb text-left box-icon-align-top box-style- color-scheme- wd-bg-none border-btm-title defaultBot \">\n\t\t\t\t\t\t\t\t\t\t<div class=\"info-box-content\">\n\t\t\t\t\t\t\t\t\t\t\t\t<div class=\"info-box-inner reset-last-child\"><p>The tax advisors, business consultants and rental property experts at <strong>WCG CPAs &amp; Advisors<\/strong> are not salespeople; we are not putting lipstick on a pig expecting you to love it. Our job remains being professionally detached, giving you information and letting you decide within our ethical guidelines and your risk profiles.<\/p>\n<p>We see far too many crazy schemes and half-baked ideas from attorneys and wealth managers. In some cases, they are good ideas. In most cases, all the entities, layering and mixed ownership is only the illusion of precision. As Chris Rock says, just because you can drive your car with your feet doesn\u2019t make it a good idea. In other words, let\u2019s not automatically convert \u201cyou can\u201d into \u201cyou must.\u201d<\/p>\n<p><strong>Let\u2019s chat so you can be smart about it.<\/strong><\/p>\n<p>We typically schedule a 20-minute complimentary quick chat with one of our Partners or our amazing Senior Tax Professionals to determine if we are a good fit for each other, and how an engagement with our team looks. Tax returns only? Business advisory? Tax strategy and planning? Rental property support?<\/p>\n<\/div>\n\n\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\n\t\t\t\t\t<style><\/style>\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t[vc_row_inner equal_height=\"yes\" el_class=\"boxes--pack\" woodmart_css_id=\"673b5f334f247\" responsive_spacing=\"eyJwYXJhbV90eXBlIjoid29vZG1hcnRfcmVzcG9uc2l2ZV9zcGFjaW5nIiwic2VsZWN0b3JfaWQiOiI2NzNiNWYzMzRmMjQ3Iiwic2hvcnRjb2RlIjoidmNfcm93X2lubmVyIiwiZGF0YSI6eyJ0YWJsZXQiOnt9LCJtb2JpbGUiOnt9fX0=\" mobile_bg_img_hidden=\"no\" tablet_bg_img_hidden=\"no\" woodmart_parallax=\"0\" woodmart_gradient_switch=\"no\" woodmart_box_shadow=\"no\" wd_z_index=\"no\" woodmart_disable_overflow=\"0\" row_reverse_mobile=\"0\" row_reverse_tablet=\"0\"][vc_column_inner width=\"1\/3\"]\t\t\t<div class=\"info-box-wrapper\">\n\t\t\t\t<div id=\"wd-6880833b7bd6b\" class=\" wd-rs-6880833b7bd6b wd-info-box wd-wpb text-left box-icon-align-top box-style- color-scheme- wd-bg-none business-boxes \">\n\t\t\t\t\t\t\t\t\t\t\t<div class=\"box-icon-wrapper  box-with-icon box-icon-simple\">\n\t\t\t\t\t\t\t<div class=\"info-box-icon\">\n\n\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<img decoding=\"async\" width=\"622\" height=\"622\" src=\"https:\/\/wcginc.com\/wp-content\/uploads\/Text-WCG-Offices-1.jpg\" class=\"attachment-full size-full\" alt=\"Text WCG Offices\" \/>\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t\t\t<div class=\"info-box-content\">\n\t\t\t\t\t\t<h4 class=\"info-box-title title wd-font-weight-600 box-title-style-default font-primary wd-fontsize-m\">Text WCG Offices<\/h4>\t\t\t\t\t\t<div class=\"info-box-inner reset-last-child\"><p>Need to get in touch through a quick text?\u00a0 We\u2019ll respond back within a day and get going!<\/p>\n<\/div>\n\n\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\t\t\t\t\t<a class=\"wd-info-box-link wd-fill\" aria-label=\"Infobox link\" href=\"sms:+17193452100?&amp;body=Hey%20WCG!%20Please%20call%20me%20to%20discuss%20your%20CPA%20services\" title=\"\"><\/a>\n\t\t\t\t\t\n\t\t\t\t\t<style><\/style>\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t[\/vc_column_inner][vc_column_inner width=\"1\/3\"]\t\t\t<div class=\"info-box-wrapper\">\n\t\t\t\t<div id=\"wd-6880834fd8436\" class=\" wd-rs-6880834fd8436 wd-info-box wd-wpb text-left box-icon-align-top box-style- color-scheme- wd-bg-none business-boxes \">\n\t\t\t\t\t\t\t\t\t\t\t<div class=\"box-icon-wrapper  box-with-icon box-icon-simple\">\n\t\t\t\t\t\t\t<div class=\"info-box-icon\">\n\n\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<img decoding=\"async\" width=\"622\" height=\"622\" src=\"https:\/\/wcginc.com\/wp-content\/uploads\/Chat-Our-Amazing-Team-1.jpg\" class=\"attachment-full size-full\" alt=\"Chat our amazing team\" \/>\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t\t\t<div class=\"info-box-content\">\n\t\t\t\t\t\t<h4 class=\"info-box-title title wd-font-weight-600 box-title-style-default font-primary wd-fontsize-m\">Call Our Amazing Team<\/h4>\t\t\t\t\t\t<div class=\"info-box-inner reset-last-child\"><p class=\" \">If you need to speak to a tax professional now, give us a call and we'll get you connected.<\/p>\n<\/div>\n\n\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\t\t\t\t\t<a class=\"wd-info-box-link wd-fill\" aria-label=\"Infobox link\" href=\"tel:719-387-9800\" title=\"\"><\/a>\n\t\t\t\t\t\n\t\t\t\t\t<style><\/style>\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t[\/vc_column_inner][vc_column_inner width=\"1\/3\"]\t\t\t<div class=\"info-box-wrapper\">\n\t\t\t\t<div id=\"wd-6880835d3a0fb\" class=\" wd-rs-6880835d3a0fb wd-info-box wd-wpb text-left box-icon-align-top box-style- color-scheme- wd-bg-none business-boxes nav-button-chat \">\n\t\t\t\t\t\t\t\t\t\t\t<div class=\"box-icon-wrapper  box-with-icon box-icon-simple\">\n\t\t\t\t\t\t\t<div class=\"info-box-icon\">\n\n\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<img decoding=\"async\" width=\"622\" height=\"622\" src=\"https:\/\/wcginc.com\/wp-content\/uploads\/Chat-With-a-Tax-Pro-2.jpg\" class=\"attachment-full size-full\" alt=\"Chat with a tax pro\" \/>\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t\t\t<div class=\"info-box-content\">\n\t\t\t\t\t\t<h4 class=\"info-box-title title wd-font-weight-600 box-title-style-default font-primary wd-fontsize-m\">Chat With a Tax Pro<\/h4>\t\t\t\t\t\t<div class=\"info-box-inner reset-last-child\"><p>Taxes can be tricky. Chat with a WCG human now and get questions answered.<\/p>\n<\/div>\n\n\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\n\t\t\t\t\t<style><\/style>\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t[\/vc_column_inner][\/vc_row_inner][\/vc_column][\/vc_row][vc_row equal_height=\"yes\" content_placement=\"top\" woodmart_css_id=\"684abef7ecaa9\" responsive_spacing=\"eyJwYXJhbV90eXBlIjoid29vZG1hcnRfcmVzcG9uc2l2ZV9zcGFjaW5nIiwic2VsZWN0b3JfaWQiOiI2ODRhYmVmN2VjYWE5Iiwic2hvcnRjb2RlIjoidmNfcm93IiwiZGF0YSI6eyJ0YWJsZXQiOnt9LCJtb2JpbGUiOnt9fX0=\" mobile_bg_img_hidden=\"no\" tablet_bg_img_hidden=\"no\" woodmart_parallax=\"0\" woodmart_gradient_switch=\"no\" woodmart_box_shadow=\"no\" wd_z_index=\"no\" woodmart_disable_overflow=\"0\" row_reverse_mobile=\"0\" row_reverse_tablet=\"0\" el_class=\"kb-consult\"][vc_column]\t\t\t<div class=\"info-box-wrapper\">\n\t\t\t\t<div id=\"wd-68bcf7fc8516a\" class=\" wd-rs-68bcf7fc8516a wd-info-box wd-wpb text-left box-icon-align-top box-style- color-scheme- wd-bg-none border-btm-title \">\n\t\t\t\t\t\t\t\t\t\t<div class=\"info-box-content\">\n\t\t\t\t\t\t<h2 class=\"info-box-title title wd-font-weight-600 box-title-style-default font-primary wd-fontsize-m\"><span class=\"ez-toc-section\" id=\"Schedule_Discovery_Meeting_Now\"><\/span>Schedule Discovery Meeting Now<span class=\"ez-toc-section-end\"><\/span><\/h2>\t\t\t\t\t\t<div class=\"info-box-inner reset-last-child\"><\/div>\n\n\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\n\t\t\t\t\t<style><\/style>\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t[vc_row_inner content_placement=\"middle\" el_class=\"client-review-secs box--card\" woodmart_css_id=\"672e712482714\" responsive_spacing=\"eyJwYXJhbV90eXBlIjoid29vZG1hcnRfcmVzcG9uc2l2ZV9zcGFjaW5nIiwic2VsZWN0b3JfaWQiOiI2NzJlNzEyNDgyNzE0Iiwic2hvcnRjb2RlIjoidmNfcm93X2lubmVyIiwiZGF0YSI6eyJ0YWJsZXQiOnt9LCJtb2JpbGUiOnt9fX0=\" mobile_bg_img_hidden=\"no\" tablet_bg_img_hidden=\"no\" woodmart_parallax=\"0\" woodmart_gradient_switch=\"no\" woodmart_box_shadow=\"no\" wd_z_index=\"no\" woodmart_disable_overflow=\"0\" row_reverse_mobile=\"0\" row_reverse_tablet=\"0\"][vc_column_inner width=\"1\/3\" woodmart_css_id=\"671780b35b49a\" parallax_scroll=\"no\" woodmart_sticky_column=\"false\" wd_collapsible_content_switcher=\"no\" wd_column_role_offcanvas_desktop=\"no\" wd_column_role_offcanvas_tablet=\"no\" wd_column_role_offcanvas_mobile=\"no\" wd_column_role_content_desktop=\"no\" wd_column_role_content_tablet=\"no\" wd_column_role_content_mobile=\"no\" mobile_bg_img_hidden=\"no\" tablet_bg_img_hidden=\"no\" woodmart_parallax=\"0\" woodmart_box_shadow=\"no\" responsive_spacing=\"eyJwYXJhbV90eXBlIjoid29vZG1hcnRfcmVzcG9uc2l2ZV9zcGFjaW5nIiwic2VsZWN0b3JfaWQiOiI2NzE3ODBiMzViNDlhIiwic2hvcnRjb2RlIjoidmNfY29sdW1uX2lubmVyIiwiZGF0YSI6eyJ0YWJsZXQiOnt9LCJtb2JpbGUiOnt9fX0=\" wd_z_index=\"no\"]\t\t<div id=\"wd-68874e76cd7bc\" class=\"wd-image wd-wpb wd-rs-68874e76cd7bc text-left \">\n\t\t\t\n\t\t\t<img decoding=\"async\" width=\"300\" height=\"200\" src=\"https:\/\/wcginc.com\/wp-content\/uploads\/265518_2057667071_tax_consultation_300-1.webp\" class=\"attachment-full size-full\" alt=\"Request a Meeting with WCG Inc\" \/>\n\t\t\t\t\t<\/div>\n\t\t[\/vc_column_inner][vc_column_inner width=\"2\/3\" woodmart_css_id=\"671780c0415fb\" parallax_scroll=\"no\" woodmart_sticky_column=\"false\" wd_collapsible_content_switcher=\"no\" wd_column_role_offcanvas_desktop=\"no\" wd_column_role_offcanvas_tablet=\"no\" wd_column_role_offcanvas_mobile=\"no\" wd_column_role_content_desktop=\"no\" wd_column_role_content_tablet=\"no\" wd_column_role_content_mobile=\"no\" mobile_bg_img_hidden=\"no\" tablet_bg_img_hidden=\"no\" woodmart_parallax=\"0\" woodmart_box_shadow=\"no\" responsive_spacing=\"eyJwYXJhbV90eXBlIjoid29vZG1hcnRfcmVzcG9uc2l2ZV9zcGFjaW5nIiwic2VsZWN0b3JfaWQiOiI2NzE3ODBjMDQxNWZiIiwic2hvcnRjb2RlIjoidmNfY29sdW1uX2lubmVyIiwiZGF0YSI6eyJ0YWJsZXQiOnt9LCJtb2JpbGUiOnt9fX0=\" wd_z_index=\"no\"]\t\t\t<div class=\"info-box-wrapper\">\n\t\t\t\t<div id=\"wd-68bcfc71da664\" class=\" wd-rs-68bcfc71da664 wd-info-box wd-wpb text-left box-icon-align-top box-style- color-scheme- wd-bg-none with-btn box-btn-static \">\n\t\t\t\t\t\t\t\t\t\t<div class=\"info-box-content\">\n\t\t\t\t\t\t\t\t\t\t\t\t<div class=\"info-box-inner reset-last-child\"><p>Ready to schedule now and talk all things rentals? Let's do it! Here is a link to a Discovery Meeting with one of our Partners or Senior Tax Professionals to understand your tax footprint and objectives, and how <strong>WCG CPAs &amp; Advisors<\/strong> might help.<\/p>\n<\/div>\n\n\t\t\t\t\t\t<div class=\"info-btn-wrapper\"><div id=\"wd-6a31c9cd8121a\" class=\"  wd-button-wrapper text-left\"><a href=\"https:\/\/calendly.com\/wcg-cpas-advisors\/discovery-meeting-instant\" title=\"\" target=\"_blank\" class=\"btn btn-style-default btn-shape-rectangle btn-size-default\">Schedule Meeting<\/a><\/div><\/div>\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\n\t\t\t\t\t<style><\/style>\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t[\/vc_column_inner][\/vc_row_inner][\/vc_column][\/vc_row]<\/div>[\/vc_column_text][\/vc_column][\/vc_row]<\/p>\n<\/div>","protected":false},"excerpt":{"rendered":"<p>Often overlooked is the Significant Participation Activity (SPA) test, found in Treasury Regulations Section 1.469-5T(a)(4). We will call this the \u201cSPA test\u201d since it sounds fun and rolls off the tongue- everyone also likes a good spa, right? We can also call this threshold or test #4 since it is fourth on the list of seven. The SPA test is halfway down the list, and conveniently also the middle lane or blended material participation test.<\/p>\n","protected":false},"author":6,"featured_media":76718,"comment_status":"closed","ping_status":"closed","template":"","meta":{"_acf_changed":false,"footnotes":""},"epkb_post_type_3_category":[184],"epkb_post_type_3_tag":[],"class_list":["post-76706","epkb_post_type_3","type-epkb_post_type_3","status-publish","has-post-thumbnail","hentry","epkb_post_type_3_category-chap-5-material-participation-rules"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.8 (Yoast SEO v27.8) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>SPA Material Participation - The SPA Test - Significant Participation Activity<\/title>\n<meta name=\"description\" content=\"The significant participation activity, or the SPA material participation test, is unique and often overlooked, but can be powerful just the same.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/wcginc.com\/kb-rental-property\/the-overlooked-spa-material-participation-test\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"SPA Material Participation - The SPA Test - Significant Participation Activity\" \/>\n<meta property=\"og:description\" content=\"The significant participation activity, or the SPA material participation test, is unique and often overlooked, but can be powerful just the same.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/wcginc.com\/kb-rental-property\/the-overlooked-spa-material-participation-test\/\" \/>\n<meta property=\"og:site_name\" content=\"WCG CPAs &amp; 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