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cates that a taxpayer's regular presence at the place where the
principal operations of an activity are conducted is indicative
of material participation (regular presence factor). S. Rept.
99-313, supra, 1986-3 C.B. (Vol. 3) at 733. Although neither the
principal business factor nor the regular presence factor is
conclusive in the determination of material participation, the
relevance of both factors in that determination demonstrates that
the time actually spent by an individual in connection with the
operations of an activity is an important factor in the deter-
mination of material participation.
We further note that the legislative history of section 469
indicates that, in order for a taxpayer to participate materially
in an activity, the taxpayer must significantly contribute to
services that are deemed integral to the operations of the ac-
tivity. S. Rept. 99-313, supra, 1986-3 C.B. (Vol. 3) at 732. It
seems to us that a taxpayer cannot contribute significantly to
such services unless that taxpayer devotes time in connection
with such services.
A discussion in the legislative history of section 469 with
respect to the performance of management services sheds addi-
tional light on the meaning and quantitative nature of the term
"material participation". That legislative history provides in
pertinent part:
Participation in management cannot be relied upon
unduly both because its genuineness and substantiality
are difficult to verify, and because a general manage-
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