- 18 -
limited involvement.9 Respondent's contention that the presence
of compensated onsite management should preclude petitioner's
board activities from consideration under section 1.469-5T(a)(7),
Temporary Income Tax Regs., supra, is consistent with this
concern.
We find that the activities of compensated onsite management
should be considered "management services" for the purposes of
section 1.469-5T(a)(7) and (b)(2)(ii)(A), Temporary Income Tax
Regs., supra. Therefore, we find that petitioner has failed to
establish material participation under section 1.469-5T(a)(7),
Temporary Income Tax Regs., supra.
Section 1.469-5T(a)(4), Temporary Income Tax Regs.
Petitioner argues that her activities constitute material
participation under section 1.469-5T(a)(4), Temporary Income Tax
Regs., 53 Fed. Reg. 5726 (Feb. 25, 1988), in that she
"significantly participated" in the condominium hotel activity
and that her aggregate participation in significant participation
activities during the year exceeded 500 hours. In this regard,
petitioner combines her activity in the condominium hotel with
the activity in her accounting partnership.
9 As an example of an abuse which Congress sought to
address in enacting sec. 469, the Senate report describes a
situation whereby outside investors could own syndication rights
in a farming activity, operated principally under the direction
of a hired agent, which has been structured to assist otherwise
passive investors to demonstrate that they play a role in
managing the farming operations. S. Rept. 99-313 at 713, 734
n.20 (1986), 1986-3 C.B. (Vol. 3) 1, 713, 734 n.20.
Page: Previous 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 NextLast modified: May 25, 2011