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remedy them. Essentially, the taxpayer treated the property not
as a rental property but as an investment property to be sold in
a short period of time.
In both Grier v. United States, supra, and Balsamo v.
Commissioner, supra, neither the taxpayers themselves nor their
agents had been sufficiently active with respect to the real
property involved to be engaged in a trade or business. In
Gilford v. Commissioner, supra, the agents were actively involved
in managing commercial real property, to a sufficient degree to
be engaged in a trade or business. In the present case, the
transient rentals of petitioners' property likewise entailed
sufficient activities to constitute a trade or business, and
while these activities were conducted by B'Mae's, they are
attributable to petitioners for purposes of determining whether
petitioners were engaged in a trade or business. Petitioner
bought the timeshares after investigating various options and
personally checked up on them in the years that followed.
We conclude that petitioners were engaged in a trade or
business with respect to the timeshares and are entitled to
ordinary loss treatment upon their disposition.
Issue 3. Additions to Tax
The parties have stipulated that if respondent prevails on
the issues discussed above, then petitioners are liable for
additions to tax as follows: Under section 6651(a), $1,352 for
1990 and $388 for 1992; and, under section 6654, $305 for 1990
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