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Mr. McKelvey looking for additional properties, i.e., 25 to
30 hours per week, is not reasonable.
Respondent also rejects petitioner's contention that
the expenses for miscellaneous items, supplies, and
utilities and telephone should be allocated to petitioner's
rental activity in the same ratio as petitioner's rental
activity bears to total income. Respondent argues that
there is no factual basis to allocate these expenses to an
activity other than petitioner's rental activity in view of
the fact that petitioner made no purchase or sale of
property during 1992 or 1993 and the fact that petitioner's
actions, taken through Mr. McKelvey, were focused on
managing and maintaining petitioner's rental properties.
Furthermore, respondent notes that there is no evidence
to establish the nature of certain expenses, such as the
miscellaneous expenses. Finally, respondent accepts
petitioner's position regarding the reallocation of
petitioner's legal and accounting expenses, franchise
taxes, and income taxes.
The general rule regarding the duration of temporary
regulations as set forth in section 7805(e)(2) provides
that any temporary regulation expires within 3 years after
the date of issuance. In general, this 3-year limitation
applies to any regulation issued after November 20, 1988.
In this case, we note that section 1.469-2T, Temporary
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