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on section 1.465-10(c), Proposed Income Tax Regs., supra, is
flawed for the same reason we reject petitioners' argument
concerning section 1.465-10(d), Example, Proposed Income Tax
Regs., supra, i.e., the proposed regulation just does not
contemplate the source of the funds, an issue governed by section
465(b)(1)(B) and its related provisions.
As to what is meant by "money * * * contributed by the
taxpayer to the activity" within the meaning of section
465(b)(1)(A), the proposed regulations provide: "A taxpayer's
amount at risk in an activity shall be increased by the amount of
personal funds the taxpayer contributes to the activity." Sec.
1.465-22(a), Proposed Income Tax Regs., 44 Fed. Reg. 32241 (June
5, 1979). According to the proposed regulations, "personal
funds" of a taxpayer are those owned by the taxpayer and are not
those acquired through borrowing. Sec. 1.465-9(f), Proposed
Income Tax Regs., 44 Fed. Reg. 32240 (June 5, 1979).
Petitioners acknowledge the proposed regulations regarding
personal funds but note that they are over 19 years old and still
in proposed form. Petitioners also note that the personal funds
requirement is not mentioned in either the statute or the
legislative history. Accordingly, petitioners claim that the
proposed regulations carry little weight as to the personal funds
requirement. We think it anomalous that petitioners embrace the
proposed regulations as support for their argument, yet argue
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