- 11 - petitioners are not entitled to the $25,000 offset provided at section 469(i). 2. Average Period of Customer Use Less Than 7 Days If the average period of customer use of petitioner's condominium unit was 7 days or less, petitioner was not engaged in a rental activity. Therefore, the activity of renting petitioner's condominium unit does not constitute a "rental real estate activity" for purposes of section 469(i), and petitioners are not entitled to use the $25,000 offset provided therein. Although the activity of renting petitioner's unit does not constitute a rental activity under this assumption, the activity will not be considered a passive activity if petitioners can establish that they materially participated in the activity. Sec. 469(c)(1)(B). Material participation is defined as involvement in the operations of an activity on a regular, continuous, and substantial basis. Sec. 469(h)(1). A taxpayer can establish material participation by satisfying one of seven tests provided in the regulations. Sec. 1.469-5T(a), Temporary Income Tax Regs., 53 Fed. Reg. 5725-5726 (Feb. 25, 1988); see also Mordkin v. Commissioner, T.C. Memo. 1996-187. In this instance, however, we see no reason to set forth these tests and discuss at length whether petitioners have satisfied any one of them. Petitioners have offered little information concerning whether their involvement in the operation of petitioner's unitPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 Next
Last modified: May 25, 2011