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the outstanding stock of Highland; (2) the equipment in question
was used exclusively in Highland’s trade or business activity
throughout the year; and (3) petitioners did not receive any
gross rental income from Highland for the equipment.
Respondent contends that section 1.469-1T(e)(3)(vi)(C),
Temporary Income Tax Regs., 53 Fed. Reg. 5703 (Feb. 25, 1988), is
inapplicable to the instant case because it requires that a
taxpayer at least temporarily stop using property in his trade or
business and start using the property in a rental activity.
Respondent argues that the exception is not available when the
property is used in the rental activity and the trade or business
activity simultaneously. Respondent makes three arguments in
support of this construction of the regulation. Respondent’s
arguments are set forth below, but we note that in our view here
“respondent advocates a strained interpretation of language
prepared by respondent’s own employees.” See Ferguson v.
Commissioner, T.C. Memo. 1992-451. In interpreting the language
in question, we bear in mind that respondent’s personnel drafted
that language, and the resolution of doubts against the draftsman
is appropriate in many circumstances. See id. (and authorities
cited therein).
First, respondent argues that section 1.469-1T(e)(3)(vi)(C),
Temporary Income Tax Regs., 53 Fed. Reg. 5703 (Feb. 25, 1988),
uses the past tense when referring to the use of the property in
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