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(C) Extraordinary personal services (within the meaning
of paragraph (e)(3)(v) of this section) are provided by
or on behalf of the owner of the property in connection
with making such property available for use by
customers (without regard to the average period of
customer use);
(D) The rental of such property is treated as
incidental to a non-rental activity of the taxpayer
under paragraph (e)(3)(vi) of this section * * *.
Section 1.469-1T(e)(3)(iv), Temporary Income Tax Regs., 53
Fed. Reg. 5702 (Feb. 25, 1988), provides, in part, a definition
of “significant personal services”:
In determining whether personal services provided in connection
with making property available for use by customers are
significant, all of the relevant facts and circumstances shall be
taken into account. Relevant facts and circumstances include the
frequency with which such services are provided, the type and
amount of labor required to perform such services, and the value
of such services relative to the amount charged for the use of
the property.
Section 1.469-1T(e)(3)(v), Temporary Income Tax Regs., 53
Fed. Reg. 5702 (Feb. 25, 1988), defines “extraordinary personal
services” as follows:
For purposes of paragraph (e)(3)(ii)(C) of this section
extraordinary personal services are provided in connection
with making property available for use by customers only if
the services provided in connection with the use of the
property are performed by individuals, and the use by
customers of the property is incidental to their receipt of
such services.
Thus, petitioner must prove that the rental of equipment to
the production companies was not a passive activity. In so
doing, he must first prove that the activity was not a “rental
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