- 49 -
materially participated during each of the years at issue in his
rental activity at Crestwood under section 1.469-5T(a)(7), Tem-
porary Income Tax Regs., supra.
Conclusion
Based on our review of the entire record before us, we find
that petitioners have failed to show that petitioner materially
participated during either of the years at issue in his rental
activity at Crestwood within the meaning of section 469 and the
regulations thereunder. Accordingly, we further find that the
loss at issue for each of those years is a passive activity loss
within the meaning of section 469.
Additions to Tax and Accuracy-Related Penalties
Section 6651
Respondent determined that petitioners are liable for each
of the years 1989 and 1990 for the addition to tax under section
6651(a)(1) because they failed to file timely their Federal
income tax return for each such year. Specifically, respondent
contends that petitioners failed to file timely those returns
because petitioners' respective applications for automatic exten-
sion for those years were invalid.
In the case of failure to file an income tax return on the
date prescribed for filing, section 6651(a)(1) imposes an addi-
tion to tax equal to five percent of the amount required to be
shown in the return, with an additional five percent to be added
for each month or partial month during which such failure con-
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