Thomas P. and Ermina A. Krukowski - Page 13




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          temporary regulations), providing that “any work done by an                   
          individual * * * in connection with an activity in which the                  
          individual owns (directly or indirectly, other than through a C               
          corporation) an interest at the time the work is done shall be                
          treated for purposes of this section as participation of such                 
          individual in the activity.”  One year later, in 1989, the                    
          Secretary prescribed section 1.469-4T(b)(2)(ii)(B), Temporary                 
          Income Tax Regs., 54 Fed. Reg. 20527, 20543 (May 12, 1989) (the               
          1989 temporary regulations), providing that “For purposes of                  
          applying section 469 and the regulations thereunder, a taxpayer’s             
          activities do not include operations that a taxpayer conducts                 
          through one or more entities (other than passthrough entities).”              
               As part of the regulatory project underlying the 1989                    
          temporary regulations, the Secretary also amended the 1988                    
          temporary regulations (the amended 1988 temporary regulations) to             
          delete the parenthetical exception “(directly or indirectly,                  
          other than through a C corporation)” from section 1.469-5T(f)(1),             
          Temporary Income Tax Regs.  Sec. 1.469-5T(f)(1), Temporary Income             
          Tax Regs.  On May 15, 1992, the Secretary finalized the amended               
          1988 temporary regulations as section 1.469-5(f)(1), Income Tax               
          Regs. (the 1992 final regulations), leaving them virtually                    
          unchanged in their final form.  Two years later, in 1994, the                 
          Secretary finalized a substantially revised version of the 1992               
          proposed regulations as section 1.469-4, Income Tax Regs. (the                
          1994 final regulations).                                                      




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