- 17 -
In this regard, we note that respondent's interpretation of
section 1.469-5T(b)(2)(ii)(A), Temporary Income Tax Regs., supra,
does not preclude petitioner from establishing material
participation under any or all of six other tests. Mordkin v.
Commissioner, T.C. Memo. 1996-187. For example, an individual
may be treated as having materially participated in a condominium
rental activity by participating for more than 500 hours,
regardless of whether full-time onsite management was employed.
Sec. 1.469-5T(a)(1), Temporary Income Tax Regs., supra.
With respect to management participation, the legislative
history of section 469 also notes:
Participation in management cannot be relied upon
unduly both because its genuineness and substantiality
are difficult to verify, and because a general
management role, absent more, may fall short of the
level of involvement that the material participation
standard is meant to require. [S. Rept. 99-313 at 713,
734-735, 1986-3 C.B. (Vol. 3) at 734-735].
The management-related restrictions applicable to section 1.469-
5T(a)(7), Temporary Income Tax Regs., supra, reflect Congress'
concern that a taxpayer seeking to materially participate in an
activity through participation in management will hire expert
agents to manage the day-to-day operations of the activity while
the taxpayer performs merely a formal management role with
8(...continued)
way suggest that, in determining whether a taxpayer's
participation in the operations of an activity is
material, it is unreasonable to examine the amount and
extent of time spent by the taxpayer in those operations.
[Mordkin v. Commissioner, supra; citation omitted.]
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