- 6 - the members of a legislature necessarily enjoy a familiarity with local conditions which this Court cannot have, the presumption of constitutionality can be overcome only by the most explicit demonstration that a classification is a hostile and oppressive discrimination against particular persons and classes. The burden is on the one attacking the legislative arrangement to negative every conceivable basis which might support it. [Fn. ref. omitted.] Thus, if plausible reasons exist for Congress’ decision to grant deductions to some taxpayers while denying them to others, and the means chosen is not so attenuated as to render the dis- tinction arbitrary or capricious, then we uphold the law. Indeed, the classification “will not be set aside if any state of facts reasonably may be conceived to justify it.” McGowan v. Maryland, 366 U.S. 420, 426 (1961) (emphasis added); see also Bryant v. Commissioner, 72 T.C. 757, 764 (1979). Respondent maintains, and we agree, that section 469(c)(7)(D)(ii) implements legitimate goals of ensuring that only real estate professionals who have an entrepreneurial stake in a real property business will qualify for relief under section 469(c)(7). The legislative history supports this view. Congress enacted section 469 to foreclose tax shelters. See S. Rept. 99–313 (1986), 1986–3 C.B. (Vol. 3) 714. The treatment of all rental activities as passive, however, created problems among real estate professionals. A full-time real estate developer, for example, could not use losses from one aspect of his business; i.e., renting properties, to offset income fromPage: Previous 1 2 3 4 5 6 7 8 9 Next
Last modified: May 25, 2011