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only example in the regulations that applies section 1.469-
1T(e)(3)(vi)(C), Temporary Income Tax Regs., 53 Fed. Reg. 5703
(Feb. 25, 1988). In our view, the applicability of the
regulation is not limited to the precise circumstances of an
example set forth in the regulation. The example plainly is
illustrative rather than limiting or exclusive.
Moreover, as stated above, section 1.469-1T(e)(3)(vi)(C)(2),
Temporary Income Tax Regs., 53 Fed. Reg. 5703 (Feb. 25, 1988),
permits the property to be used in the trade or business during
either the current year or 2 of the 5 years that precede the
taxable year. Example (6) is an illustration of the property
being used in 2 of the 5 preceding years. Subdivision (ii) of
example (6) provides: “For 1987 and 1989, the taxpayer owns an
interest in a trade or business activity, and the farmland which
the taxpayer leases to the rancher was used in such activity for
two out of the five immediately preceding taxable years.” Here,
petitioners’ property was used in the trade or business during
the current year. The facts of example (6) and the facts of the
instant case relate to different clauses of section 1.469-
1T(e)(3)(vi)(C)(2), Temporary Income Tax Regs., 53 Fed. Reg. 5703
(Feb. 25, 1988).
Respondent also argues that section 1.469-1T(e)(3)(vi)(C),
Temporary Income Tax Regs., 53 Fed. Reg. 5703 (Feb. 25, 1988),
does not apply to the facts here because the rental activity and
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