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in connection with making property available for use by
customers only if the services provided in connection
with the use of the property are performed by
individuals, and the use by customers of the property
is incidental to their receipt of such services. * * *
Petitioners contend that several of the exceptions to the
definition of a rental activity apply in this case. For 2000,
petitioners contend that the average rental period was less than
7 days. For both 1999 and 2000, petitioners contend that they
personally contributed significant and extraordinary personal
services. On the other hand, respondent contends that the
average rental period was based on the contract between
petitioners and AYC as lessee, and that petitioners did not
contribute significant or extraordinary personal services. We
agree with respondent.
The yacht owners’ contract concerning Moonshadow was an
annual exclusive lease agreement between petitioners and AYC,
which was automatically renewable each year unless otherwise
terminated. AYC is a professional organization engaged in the
charter boat business. Under the terms of the contract,
petitioners leased Moonshadow to AYC, granted AYC possession,
dominion, and control over Moonshadow, and gave AYC the exclusive
right to sublease Moonshadow to third-party bare boat charterers
for the entire year. AYC would then enter into individual
charter contracts with third parties. Petitioners were not a
party to the individual charter contracts, and, indeed,
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