- 17 -
do not allow them to use it [i.e., the only rule stated
in sec. 1.469-4T(b)(ii)(B), Temporary Income Tax Regs.,
45 Fed. Reg. 20543 (May 12, 1989), namely, that “a
taxpayer's activities do not include operations that
the taxpayer conducts through one or more entities
(other than passthrough entities).”]. See sec.
1.469-11, Income Tax Regs. [Id.]
Although we recognize that section 1.469-11(b)(1), Income Tax
Regs., does not explicitly reference section 1.469-4T(b)(ii)(B),
Temporary Income Tax Regs., but, instead, allows taxpayers to use
the rules set forth in the 1992 proposed regulations, we believe
that this distinction is meaningless under the facts herein.
Whereas section 1.469-4T(b)(ii)(B), Temporary Income Tax Regs.,
contains an explicit rule under which a taxpayer is not
considered to participate in a C corporation’s activities,
petitioner effectively asks the Court to imply the same rule in
the 1992 proposed regulations by virtue of the fact that those
regulations are silent as to the inapplicability of such a rule.
We decline to do so. Accord Sidell v. Commissioner, T.C. Memo.
1999-301; Connor v. Commissioner, T.C. Memo. 1999-185.
We conclude that petitioner may not offset part of the
income that he realized on his rental of the office building to
the law firm, by the loss that he realized on his rental of the
club to the health club. We have considered all arguments in
Page: Previous 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 NextLast modified: May 25, 2011