Barry H. and Marilyn S. Scheiner - Page 5

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          records of the condominium association to be certain that                          
          accounting principles were properly applied.                                       
                Petitioner attended eight board of directors meetings in                     
          1991 and six in 1992.4  Petitioner also attended the 1991 and                      
          1992 annual meetings of the council of unit owners in her                          
          capacity as a board member.  Because petitioner was the only                       
          board member who resided in Montgomery County, Maryland, unit                      
          owners living nearby often contacted petitioner in regard to                       
          various matters concerning Wisp.  In 1991, petitioner spent at                     
          least 100 hours, but not more than 148 hours, on board-related                     
          matters.  In 1992, petitioner spent at least 90 hours, but not                     
          more than 123 hours, on board-related matters.                                     
                On Schedules C of their 1991 and 1992 Federal income tax                     
          returns, petitioners claimed net losses in the amounts of $12,723                  
          and $9,765, respectively, from the condominium hotel activity.5                    
          In her notice of deficiency, respondent determined that the                        
          losses were passive activity losses within the meaning of section                  
          469.  Therefore, the losses were allowed only to the extent of                     
          passive income.                                                                    







          4 In his capacity as a unit owner, petitioner Barry H.                             
          Scheiner attended three such meetings in 1991 and two in 1992.                     
          5  On the 1992 return, separate Schedules C were filed by                          
          each petitioner reporting one-half the total loss.                                 


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