Charles Robert Schetzer - Page 9




                                        - 9 -                                         
          Section 469(i) simply is an exercise by Congress of its broad               
          authority to recognize differences between various kinds of                 
          activities.  See Brushaber v. Union Pac. R.R., 240 U.S. 1 (1916).           
          As for the disallowance of the loss for other passive activities,           
          such as petitioner's automobile rental activity, the effect is an           
          incidental financial burden and not an impermissible                        
          interference.  See Maher v. Roe, 432 U.S. 464, 471 (1977); Black            
          v. Commissioner, 69 T.C. 505, 509-510 (1977).                               
               We hold that the legislative classification provided by                
          section 469(i) is constitutional.                                           
               Petitioner has made other arguments that we have considered            
          in reaching our decision.  To the extent that we have not                   
          discussed these arguments, we find them to be without merit.                
              To reflect our disposition of the disputed issue, as well as           
          the parties' concessions,                                                   


                                                  Decision will be entered            
                                             for respondent as to the                 
                                             deficiencies in taxes and for            
                                             petitioner as to the accuracy-           
                                             related penalty for 1994.                











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