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5T(a)(2), (3), and (7), Temporary Income Tax Regs., 53 Fed. Reg.
5725-5726 (Feb. 25, 1988), provides, in relevant part, that an
individual shall be treated as materially participating if the
individual meets any of the following tests:
(2) The individual's participation in the
activity for the taxable year constitutes substantially
all of the participation in such activity of all
individuals (including individuals who are not owners
of interests in the activity) for such year;
(3) The individual participates in the activity
for more than 100 hours during the taxable year, and
such individual's participation in the activity for the
taxable year is not less than the participation in the
activity of any other individual (including individuals
who are not owners of interests in the activity) for
such year;
* * * * * * *
(7) Based on all of the facts and circumstances
(taking into account the rules of paragraph (b) of this
section), the individual participates in the activity
on a regular, continuous, and substantial basis during
such year.
The "material participation standard identifies an important
distinction between different types of taxpayer activities." S.
Rept. 99-313, at 716 (1986), 1986-3 C.B. (Vol. 3) 1, 716. The
focus of section 469 is directed to suspending the so-called tax
preferences unless there is "substantial and bona fide
involvement in the activities to which the preferences relate."
Id. It is necessary "to examine the materiality of a taxpayer's
participation in an activity in determining the extent to which
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