There is no unique definition of active trade or business in the QOF tax law. It is the same convoluted tax code that governs this definition. We primarily rely on Code Sec. 162, but it is not nor has never been precisely defined therein. If you have an active trade or business in general, then it is the same for QOF purposes. Your personal tax accountant should be able to walk you through that discussion, but it's a business activity engaged for profit that is regular and recurring of activities in that business, etc. What it is not is an investment in a mutual fund, a standard triple net lease, owning raw land or real estate where there is no regular business conduct going on throughout the year, etc. The sin businesses do not qualify under QOF (golf course, country club, massage parlor, hot tub facility, sun tan facility, racetrack or gambling, store selling alcohol for offsite consumption).
