Bruce and Judy Bailey - Page 3

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          1994, to treat all interests in rental real estate as a single              
          rental real estate activity pursuant to section 469(c)(7)(A).               
               Petitioner kept daily calendars for 1996 and 1997 that                 
          contained various appointments related to her law practice and              
          real estate activities.  In preparation for trial, petitioner               
          prepared a separate summary report of her calendars for 1996 and            
          1997.  Each summary report provided an estimate of the total                
          number of hours spent on activities related to each rental                  
          property and gave a general description of the activities                   
          performed by petitioner.  The summary report also provided a                
          general list of the legal activities performed by petitioner and            
          estimated that she spent 876 hours in the practice of law in                
          Indian Wells Properties                                                     
               Petitioner estimated that in 1997 she spent approximately              
          311 hours on activities related to the Indian Wells properties.             
          Petitioner summarized her activities for 1997 as “re-rented,                
          cleaned, did gardening, showed property to prospective renters,             
          inspected repairmen’s work”.  She also “started [the] process to            
          sell by drawing up option[s] to purchase for prospective buyers             
          [and] holding open houses.”  Petitioner’s 1997 calendar indicates           
          that she made 13 visits to the Indian Wells properties, 7 of                
          which were in conjunction with matters relating to her law                  

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Last modified: May 25, 2011