Robert Serenbetz and Karen J. Serenbetz - Page 6

                Petitioners contend that they materially participated in the                 
          rental of their Vermont condominium, thus making section 469(a) not                
          applicable.  "Material participation" in an activity is defined as                 
          regular,  continuous, and substantial involvement.  Sec. 469(h)(1).                
                Petitioners contend that they satisfy the safe harbor                        
          requirements of section 1.469-5T(a)(3), Temporary Income Tax Regs.,                
          53 Fed. Reg. 5702 (Feb. 25, 1988), for material participation.                     
          That section permits a finding of material participation if:                       
                The individual participates in the activity for more than                    
                100 hours during the taxable year, and such individual's                     
                participation in the activity for the taxable year is not                    
                less than the participation in the activity of any other                     
                individual (including individuals who are not owners of                      
                interests in the activity) for such year[.]                                  
                Petitioners claim they spent 139 hours in the involvement of                 
          the operations of the rental of their Vermont condominium in 1991,                 
          and 115.5 hours in 1992.  In this regard, they testified (by using                 
          a written activities list that was  prepared  from a                               
          contemporaneously kept diary) as to specific tasks they performed                  
          during the years under consideration.  Their written activities                    
          list for 1991 shows 7 hours spent preparing Federal and State                      
          income tax returns, 20 hours traveling to and from Vermont for the                 
          annual meeting and party of the condominium association, and 36                    
          hours preparing for, attending, discussing, and reviewing minutes                  
          of meetings of the condominium association, its Board of Directors,                
          and the partnership.  The 1991 written activities list also records                

Page:  Previous  1  2  3  4  5  6  7  8  9  Next

Last modified: May 25, 2011