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participation provided in section 1.469-5T(a)(3), Temporary Income
Tax Regs., 53 Fed. Reg. 5726 (Feb. 25, 1988).3 That section
provides for material participation if:
The individual participates in the activity for more than
100 hours during the taxable year, and such individual's
participation in the activity for the taxable year is not
less than the participation in the activity of any other
individual (including individuals who are not owners of
interests in the activity) for such year[.]
Id.
Respondent argues that (1) petitioners did not spend at least
100 hours participating in the rental of each of the Hawaiian
condominiums, and (2) other individuals participated more in the
activities than did petitioners.
We are satisfied that petitioners participated in the rental
of their Hawaiian condominiums on a regular, continuous, and
substantial basis.
At trial, Mr. Pohoski testified that he spent 800 hours
participating in the rental of the two Hawaiian condominiums during
1993, 650 hours at the Maui condo, and 150 hours at the Molokai
condo. Of those total hours, Mr. Pohoski testified that 100 hours
3 In their pretrial memorandum, petitioners claimed that
they satisfied the safe harbor requirements of sec. 1.469-
5T(a)(1), Temporary Income Tax Regs., 53 Fed. Reg. 5725 (Feb. 25,
1988). That section allows a finding of material participation
if the taxpayer participates in the activity for more than 500
hours during the taxable year. At trial, Mr. Pohoski testified
that he and Mrs. Pohoski spent 650 hours working on the Maui
condominium. However, in their posttrial brief, petitioners did
not address this safe harbor and conceded that they spent only
325.50 hours working on the Maui condominium.
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