Robert Serenbetz and Karen J. Serenbetz - Page 7

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          several hours for reviewing equipment and operating budgets and for                
          paying property taxes, special condominium assessments,                            
          housekeeping bills, and maintenance bills.  Similar activities were                
          recorded on the 1992 written activities list.                                      


                Investor activities do not qualify as participation in a trade               
          or business unless the individual is directly involved in the day-                 
          to-day management or operations of the activity. Sec. 1.469-                       
          5T(f)(2)(ii), Temporary Income Tax Regs., 53 Fed. Reg. 5727 (Feb.                  
          25, 1988).  Much of petitioners' activities during 1991 and 1992,                  
          like those described above, are investor activities or activities                  
          of a personal nature that do not qualify as participation in a                     
          trade or business.  See Toups v. Commissioner, T.C. Memo. 1993-359;                
          sec. 1.469-5T(f)(2)(ii), Temporary Income Tax Regs., 53 Fed. Reg.                  
          5727 (Feb. 25, 1988).                                                              
                The financial work done by petitioners was in connection with                
          their investment.  The Treasury regulations provide that "Work done                
          by an individual in the individual's capacity as an investor in an                 
          activity shall not be treated as participation in the activity for                 
          purposes of this section [sec. 469] unless the individual is                       
          directly involved in the day-to-day management or operations of the                
          activity."  Sec. 1.469-5T(f)(2)(ii)(A), Temporary Income Tax Regs.,                
          53 Fed. Reg. 5727 (Feb. 25, 1988).  Here, the day-to-day management                
          or operations of the partnership was by a full-time staff rather                   
          than petitioners.  See Mordkin v. Commissioner, T.C. Memo. 1996-                   




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