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who are not owners of interests in the activity) for
such year;
(4) The activity is a significant participation
activity * * * for the taxable year, and the
individual’s aggregate participation in all significant
participation activities during the year exceeds 500
hours;
(5) The individual materially participated in the
activity * * * for any five taxable years (whether or
not consecutive) during the ten taxable years that
immediately precede the taxable year;
(6) The activity is a personal service activity * * *,
and the individual materially participated in the
activity for any three tax years (whether or not
consecutive) preceding the taxable year; or
(7) Based on all facts and circumstances * * *, the
individual participates in the activity on a regular,
continuous, and substantial basis during such year.
“Participation” generally means “all work done in an
activity by an individual who owns an interest in the activity”.
Sec. 1.469-5T(f), Temporary Income Tax Regs., 53 Fed. Reg. 5697
(Feb. 25, 1988). Work done by an individual in the individual’s
capacity as an investor in an activity is not generally treated
as participation in the activity. Sec. 1.469-5T(f)(2)(ii)(A),
Temporary Income Tax Regs., supra. Additionally, work done by
the individual is not treated as participation in the activity if
such work is not of a type that is customarily done by an owner
of such activity and one of the principal purposes for performing
such work is to avoid the passive activity limitations of section
469. Sec. 1.469-5T(f)(2)(i), Temporary Income Tax Regs., supra.
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