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activities of the partnership for purposes of section 1.469-
1T(e)(3)(vi)(C), Temporary Income Tax Regs., 53 Fed. Reg. 5703
(Feb. 25, 1988). We noted that the “The regulations require the
taxpayer own ‘an interest in such trade or business activity’,
not that the taxpayer be the sole owner of the trade or
business.” Tarakci v. Commissioner, supra (quoting sec. 1.469-
1T(e)(3)(vi)(C)(1), Temporary Income Tax Regs., 53 Fed. Reg. 5703
(Feb. 25, 1988)). There, the taxpayer was actively involved in
the affairs of the partnership, “substantially contribut[ing]
both time and effort to the success of * * * [it].” Id.
Here, petitioner’s ownership of 50 percent of Highland’s
stock, as well as his substantial time commitment to Highland,
satisfies the requirement that he have an interest in such trade
or business.
Respondent argues that the holding of Tarakci conflicts with
the language of section 1.469-1T(e)(3)(vi)(C), Temporary Income
Tax Regs., 53 Fed. Reg. 5703 (Feb. 25, 1988), and section 1.469-
1T(e)(3)(viii) Example (6), Temporary Income Tax Regs., 53 Fed.
Reg. 5703 (Feb. 25, 1988). We disagree with respondent’s
analysis.
In our view, the reasoning and the holding in the Tarakci
case are correct and properly applicable to the facts and
circumstances here. The trade or business activities of
petitioners for 1996 include the trade or business activities of
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