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v. Commissioner, T.C. Memo. 1997-331; Speer v. Commissioner, T.C.
Memo. 1996-323; Goshorn v. Commissioner, T.C. Memo. 1993-578.
Even if such hours were accurate, petitioners would not meet
any of the material participation tests. Petitioners have not
spent more than 500 hours in the activity. Petitioner’s
commission agreement with Mountain Country to manage the rental
of the Lake Arrowhead property would preclude petitioners’
activities from being substantially all of the participation in
the activity. Petitioners have not presented evidence to
establish that the participation by Mountain Country did not
exceed petitioners’ participation. Petitioners have not presented
evidence of their material participation in the Lake Arrowhead
property for 5 of the prior 10 years.
Petitioners also fail the facts and circumstances test based
on petitioner’s commission agreement with Mountain Country to
operate the rental of their Lake Arrowhead property. The realty
company found tenants, showed the property, collected rents, and
paid for repairs. See Barniskis v. Commissioner, T.C. Memo.
1999-258 (taxpayers did not materially participate where
taxpayers utilized a management company to handle the rental of
their resort condominium); Chapin v. Commissioner, T.C. Memo.
1996-56 (taxpayers’ participation did not constitute
participation on a regular, continuous, and substantial basis
where taxpayers used a rental agent to handle all leasing
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