Personal-Service Activity

DEFINITION of 'Personal-Service Activity'

Any business enterprise with the primary purpose of providing personal services. Personal-service activities encompass a wide range of professions, including law, medicine, engineering, design, finance, accounting and even performing arts. As the name implies, a personal-service activity focuses on directly providing a personalized service, such as legal advice or medical treatment, to an individual or group for compensation. Personal-service activities do not require the use of capital in order to generate material income.

BREAKING DOWN 'Personal-Service Activity'

The material participation test for personal-service activities determines whether or not a taxpayer is a material participant in a business. Taxpayers who meet test guidelines will most likely be able to deduct business losses.

RELATED TERMS
  1. Personal-Service Corporation

    A corporation that is created for the purpose of providing personal ...
  2. Material Participation Test

    A set of criteria that determines whether a taxpayer is a material ...
  3. Passive Activity

    Activity in which the taxpayer did not materially participate ...
  4. Passive Income

    Earnings an individual derives from a rental property, limited ...
  5. Business Activities

    Any activity that is engaged in for the primary purpose of making ...
  6. Operating Activities

    A company's typical daily processes that generate income. Operating ...
Related Articles
  1. Investing

    Understanding Operating Activities

    Operating activities are the daily processes conducted by a company to generate income.
  2. Investing

    What are Business Activities?

    Business activities are any actions in which a company engages to make a profit.
  3. Financial Advisor

    Next for Robo-Advisors: A Human Touch?

    Robo-advisors are turning the business of providing investment and financial advice on its head as more important players jump on board in varying ways.
  4. Financial Advisor

    Financial Engines Broadens Advice Offerings

    Financial Engines is broadening its services to include insurance and healthcare advice.
  5. Investing

    The Basics Of Value Chain Analysis

    Value chain analysis establishes an action plan to understand and implement actvities that create values to a firm's clients, resulting in firm profits.
  6. Investing

    Understanding Operations Management

    Operations management is concerned with converting materials and labor into goods and services as efficiently as possible to maximize profits.
  7. Managing Wealth

    The Highest-Paying Engineering Careers

    Learn more about some of the highest-paying jobs in field of engineering. With just a bachelor's degree, most engineers in these jobs make well over $100,000.
  8. Personal Finance

    20 Medical Expenses You Didn't Know You Could Deduct

    To lower your tax bill, be sure not to miss out on these commonly overlooked medical tax deductions.
  9. Investing

    What is a Firm?

    A firm is a business or organization that sells goods or services on a for-profit basis.
  10. Investing

    Cash Flow From Financing Activities (CFF)

    Cash flow from financing activities is typically the third and final section of the statement of cash flows. It shows changes to cash resulting from activities such as issuing stocks and bonds ...
RELATED FAQS
  1. What are the primary activities of Michael Porter's value chain?

    Understand the primary activities of Michael Porter's value chain, and learn how a company can optimize those activities ... Read Answer >>
  2. What are examples of key operating activities in a company?

    Discover the things that make up a company's operating activities, including examples of some the key operating activities ... Read Answer >>
  3. Is a person an active participant in an employer-sponsored retirement plan if he ...

    Yes. An individual is considered an active participant even if his or her participation in the plan has been for only a short ... Read Answer >>
  4. How is Substantial Gainful Activity (SGA) calculated for those who own their own ...

    Understand the meaning of substantial gainful activity as defined by the Social Security Administration and learn how it ... Read Answer >>
  5. Why do companies decide to unbundle their lines of business?

    In recent years, companies have discovered that there are limits to the gains created by having all major business activities ... Read Answer >>
  6. Does a flexible spending account (FSA) cover chiropractic?

    Learn about health care flexible spending accounts and whether they cover chiropractic treatment. Read about alternative ... Read Answer >>
Hot Definitions
  1. Diversification

    A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique ...
  2. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
  3. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
  4. Brazil, Russia, India And China - BRIC

    An acronym for the economies of Brazil, Russia, India and China combined. It has been speculated that by 2050 these four ...
  5. Brexit

    The Brexit, an abbreviation of "British exit" that mirrors the term Grexit, refers to the possibility of Britain's withdrawal ...
  6. Underweight

    1. A situation where a portfolio does not hold a sufficient amount of a particular security when compared to the security's ...
Trading Center