- 14 -
in the individual’s capacity as an investor in an activity is not
generally treated as participation in the activity. Sec. 1.469-
5T(f)(2)(ii)(A), Temporary Income Tax Regs., 53 Fed. Reg. 5727
(Feb. 25, 1988).
With respect to the evidence that may be used to establish
hours of participation, section 1.469-5T(f)(4), Temporary Income
Tax Regs., supra, provides:
The extent of an individual’s participation in an
activity may be established by any reasonable means.
Contemporaneous daily time reports, logs, or similar
documents are not required if the extent of such
participation may be established by other reasonable
means. Reasonable means for purposes of this paragraph
may include but are not limited to the identification
of services performed over a period of time and the
approximate number of hours spent performing such
services during such period, based on appointment
books, calendars, or narrative summaries.
We believe that the methods that petitioner used to
approximate the time that he spent performing services in real
property trades or businesses are not reasonable within the
meaning of section 1.469-5T(f)(4), Temporary Income Tax Regs.,
supra. Petitioners’ estimates are based on petitioner’s calendar
entries and do not reliably or reasonably reflect the hours that
petitioner actually devoted to United Air Temp or to his rental
real estate activities. Petitioner assigned hours to the
activities in his calendar before the activities occurred, and
his estimates were not later adjusted to reflect the actual
duration of the activities. In preparation for trial in 2001,
Page: Previous 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 NextLast modified: May 25, 2011