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Commissioner, T.C. Memo. 1996-509. Our acceptance of the narrative
summary, however, does not require us to accept the accuracy of the
amount of time petitioners claim they spent participating in the
rental of the condominiums. Id.
Mr. Pohoski credibly testified that petitioners maintained
contemporaneous records (although such records were not introduced
at trial). These records included a calendar that indicated the
name of the tenant, the daily rental rate, and the arrival and
departure times for the tenants at the condominiums, as well as a
database listing on petitioners' computer all prospective tenants.
We believe that these records laid the foundation for petitioners
to determine the amount of time they spent with respect to many of
their rental activities as provided in the narrative summary.
Further, other evidence, such as the management contract
between petitioners and Rainbow Reservations and the testimony of
Marcia Alders, the sole shareholder and manager of Rainbow
Reservations, supports petitioners' claims of their relative level
of participation at the Maui condo. We thus conclude that
petitioners have sustained their initial burden of establishing
through reasonable means their participation in the rental of the
Hawaiian condominiums.
B. Material Participation Safe Harbor
Petitioners assert that their rental of the Hawaiian
condominiums satisfies the safe harbor requirements for material
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