- 12 -
prospective tenants. A cleaning service cleaned the condominium
after each tenant vacated the premises throughout the rental
season. Maintenance workers performed repairs to the
condominium. The performance of this work constituted the
regular and continuous participation in the activity, and notably
absent was any participation by petitioners. Petitioners'
contribution to the activity consisted of a single, albeit
thorough, cleaning of the condominium after each rental season.
They may have extended this participation over six or eight
weekends during the nonrental seasons, but their contribution to
the activity did not constitute participation on a basis that was
regular and continuous.7
Based on the foregoing, we find that petitioners did not
materially participate in this activity.
7 The report of the Finance Committee notes:
Another factor that may be highly relevant in
showing regular, continuous, and substantial
involvement in the operations of an activity, and
thereby establishing material participation, is
whether, and how regularly, the taxpayer is present at
the place or places where the principal operations of
the activity are conducted. For example, in the case
of an employee or professional who invests in a horse
breeding activity, if the taxpayer lives hundreds of
miles from the site of the activity, and does not often
visit the site, such taxpayer is unlikely to have
materially participated in the activity. * * * [S.
Rept. 99-313, at 733 (1986), 1986-3 C.B. (Vol. 3) 1,
733.]
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 Next
Last modified: May 25, 2011