Steven D. Rapp and Judith A. Rapp - Page 9




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          Regs., 53 Fed. Reg. 5726 (Feb. 25, 1988).  Respondent argues that           
          petitioners have not satisfied this material participation test.            
               We must initially decide whether petitioners participated in           
          the rental of their unit for more than 100 hours during each of             
          the taxable years in issue.  Section 1.469-5(f)(1), Income Tax              
          Regs., generally provides that any work done by an individual in            
          connection with an activity in which the individual owns an                 
          interest at the time the work is done shall be treated as                   
          participation of the individual in the activity.  We consider               
          petitioners' combined hours of participation in deciding whether            
          this material participation test is satisfied.  See sec.                    
          469(h)(5); sec. 1.469-5T(f)(3), Temporary Income Tax Regs., 53              
          Fed. Reg. 5727 (Feb. 25, 1988).                                             
               With respect to the evidence which may be used to establish            
          hours of participation, section 1.469-5T(f)(4), Temporary Income            
          Tax Regs., 53 Fed. Reg. 5727 (Feb. 25, 1988), provides:                     
                    (4)  Methods of proof.  The extent of an                          
               individual's participation in an activity may be                       
               established by any reasonable means.  Contemporaneous                  
               daily time reports, logs, or similar documents are not                 
               required if the extent of such participation may be                    
               established by other reasonable means.  Reasonable                     
               means for purposes of this paragraph may include but                   
               are not limited to the identification of services                      
               performed over a period of time and the approximate                    
               number of hours spent performing such services during                  
               such period, based on appointment books, calendars, or                 
               narrative summaries.                                                   
               Petitioners submitted copies of their monthly calendars from           
          1991, 1992, and 1993, two documents which purport to summarize              





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