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all constitute investor activities.3 Petitioners have failed to
establish that they materially participated in the rental
activity. Even if we were to assume that petitioners expended
100 hours in their rental activity during the years in issue,
they have not proved that their participation was greater than
the management company's participation.
Other Individuals' Participation
The second requirement of the section 1.469-5T(a)(3),
Temporary Income Tax Regs., supra, material participation test is
that petitioners' participation in the activity of renting their
unit must not have been less than the participation in such
activity of any other individuals. Petitioners must establish
that no other individuals participated in the activity of renting
their unit for more time than they did during the years in issue.
Dennis Rysdahl, the founder, president, secretary, and
general manager of TMC, was involved in the construction of
Bluefin Bay in 1984 and, more recently, an adjacent development
called Tofte Cove. Mr. Rysdahl currently oversees the management
and operation of Bluefin Bay and did so during the taxable years
in issue.
In a letter dated June 30, 1997, to the Bluefin Bay and
Tofte Cove owners, Mr. Rysdahl solicited contributions to a fund
3 We find that the listed hours of participation include
38.5 hours, 25.25 hours, and 27.25 hours of investor activities
for 1991, 1992, and 1993, respectively.
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