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Respondent determined deficiencies in petitioners’ Federal
income taxes of $1,568 and $3,696 for the taxable years 1999 and
2000, respectively.
After respondent’s concessions,2 the issue for decision is
whether the losses petitioners incurred in their sailboat charter
business are subject to the passive activity loss rules of
section 469. We hold that they are.
Background
Some of the facts have been stipulated, and they are so
found. We incorporate by reference the parties’ stipulation of
facts and accompanying exhibits.
At the time that the petition was filed, petitioners resided
in Kirkland, Washington. (References to petitioners individually
are to Mr. White or Mrs. White.)
During the years in issue, Mr. White was employed full time
as a glazing estimator, and Mrs. White was employed full time as
a project coordinator.
At a time not disclosed in the record, petitioners started a
sailboat charter business called GW Rentals, which they operated
throughout the years in issue. The sailboat used in petitioners’
business during the years in issue was a 1998 42-foot Catalina
2 Respondent concedes that: (1) Petitioners’ sailboat
charter activity is a trade or business; and (2) petitioners
incurred net losses from their sailboat charter business of
$5,593 for 1999 and $13,186 for 2000.
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Last modified: May 25, 2011