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activities for the purpose of determining material participation.
Since it is undisputed that petitioner materially participated in
the trade or business activities of Highland,7 petitioners
automatically meet the material participation standard with
respect to their leasing activity.
For the foregoing reasons, petitioners’ losses during 1996
do not constitute nondeductible passive losses under section 469.
Reviewed and adopted as the report of the Small Tax Case
Division.
Decision will be entered
under Rule 155.
6(...continued)
subject to sec. 469.
7An individual is treated as materially participating in an
activity for the taxable year if the individual participates in
the activity for more than 500 hours during such year. Sec.
1.469-5T(a)(1), Temporary Income Tax Regs., 53 Fed. Reg. 5725
(Feb. 25, 1988). The parties stipulated that during the year in
issue, petitioner worked 40 or more hours per week for Highland.
Thus, petitioner unquestionably satisfies the 500-hour
requirement.
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