- 10 - monthly basis. This decision making process occurs each month in which a rental income or expense statement is received from the rental agreement. At that time a management decision is made whether to continue or terminate the participation in the rental agreement * * * in that the rental agreement is terminable at will * * *. * * * [Petitioners] may at any time elect to provide the rental services themselves or to procure another agent for these services. Under these conditions the Petitioners are making significant and [bonafide] management decisions on a month-to-month basis whether to continue, cancel, or make another agency relationship. Petitioners have offered no evidence to indicate that they personally approved of tenants, decided rental terms, approved of expenditures for repairs and capital improvements, or in any way participated in the management of the unit in a significant and bona fide sense. It appears that VDS, rather than petitioners, performed all significant management activities. Moreover, we do not consider petitioner's ability to terminate the contract with VDS as active participation per se; the legislative history of section 469 explains that taxpayers must themselves genuinely exercise independent discretion and judgment. On the basis of the record before us, we conclude that petitioners have failed to establish that they actively participated in the activity of renting the condominium unit during each of the years in issue. Therefore, assuming that the average period of customer use of petitioner's condominium unit was greater than 7 days,Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 Next
Last modified: May 25, 2011