- 34 -
II), at II-148 (1986), 1986-3 C.B. (Vol. 4) 134, 148.
In any event, we shall consider the language of section
469(h)(1) and its underlying legislative history to determine
whether section 1.469-5T(a)(1), Temporary Income Tax Regs., 53
Fed. Reg. 5725 (Feb. 25, 1988), is a reasonable construction of
that statute. That Code section provides:
A taxpayer shall be treated as materially participating
in an activity only if the taxpayer is involved in the
operations of the activity on a basis which is--
(A) regular,
(B) continuous, and
(C) substantial.
Although neither section 469(h)(1) nor any other provision
in section 469 prescribes any specific standards for determining
whether a taxpayer is involved in the operations of an activity
on a regular, continuous, and substantial basis, the material
participation test imposed by that section is, without question,
time sensitive in nature. A taxpayer cannot be involved in the
operations of an activity unless that taxpayer spends time in
connection with those operations. While the determination of
whether an individual's involvement in the operations of an
activity constitutes participation for purposes of section 469
requires an examination of the nature of the individual's in-
volvement in those operations, the determination of whether an
individual's participation is material requires an examination of
the amount and extent of such involvement. Section 469(h)(1)
prescribes that the amount and extent of such involvement be
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