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742 (1986), 1986-3 C.B. (Vol. 3) 1, 742.3 This legislative
history provides petitioners little support. As previously
discussed, petitioners provided no significant services in their
capacities as lessors to Hairston or as owners of the equipment.
Moreover, their property rentals were not short term, since their
lease of their heavy construction equipment to Hairston was for
an indefinite term.
Petitioners’ equipment rental activity constitutes a passive
rental activity subject to the loss limitations of section 469.
Decision will be entered for
respondent.
3 The Senate report states in pertinent part:
For example, an activity consisting of the short-
term leasing of motor vehicles, where the lessor
furnishes services including maintenance of gas and
oil, oil changing and lubrication and engine and body
repair, is not treated as a rental activity. By
contrast, furnishing a boat under a bare boat charter,
or a plane under a dry lease (i.e., without pilot,
fuel, or oil), constitutes a rental activity under the
passive loss rule, because no significant services are
performed in connection with providing the property.
[S. Rept. 99-313, at 742 (1986), 1986-3 C.B. (Vol. 3)
1, 742.]
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