- 40 -
53 Fed. Reg. 5725 (Feb. 25, 1988), we reject petitioners' argu-
ment that, because that regulation is quantitative in nature, it
is an unreasonable interpretation of section 469(h)(1) and thus
is invalid.22 We conclude that that regulation implements sec-
tion 469(h)(1) in a reasonable manner by providing as one of
seven alternative ways for an individual to satisfy the material
participation test of section 469(h)(1) that an individual shall
be treated as materially participating in an activity for a
taxable year if he or she participates in the activity for more
than 500 hours during such year. Accordingly, we hold that
regulation to be valid.
Application of Section 1.469-5T(a)(1),
Temporary Income Tax Regs.
Petitioners claim that petitioner should be treated as
having materially participated in his rental activity at
Crestwood for each of the years at issue under section 1.469-
22 Petitioners also contend that sec. 1.469-5T(a)(1), Temporary
Income Tax Regs., 53 Fed. Reg. 5725 (Feb. 25, 1988), is invalid
because it is ambiguous in that it does not provide adequate
guidelines for defining how to compute the number of hours
devoted to a particular activity. An interpretative regulation
must be upheld if it "implement[s] the congressional mandate in
some reasonable manner". National Muffler Dealers Association,
Inc. v. United States, 440 U.S. 472, 476-477 (1979) (quoting
United States v. Cartwright, 411 U.S. 546, 550 (1973)). Such a
regulation cannot be declared invalid, unless it is "unreasonable
and plainly inconsistent with the revenue statutes". Commis-
sioner v. South Texas Lumber Co., 333 U.S. 496, 501 (1948). The
lack of precision by a regulation in defining its own terms may
not necessarily be a basis for holding that regulation invalid,
provided that the regulation is construed in a manner so that it
harmonizes with the plain language of the statute, its origin,
and its purpose.
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