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prove the year and fact of worthlessness of the loans deducted in
1993, we need not reach the issue of whether he has shown his
bases in the various loans.
Petitioner's Real Estate Rental Activity
Respondent determined that petitioner is not entitled to
real estate rental losses claimed in 1992 and 1993 because his
rental activity is a "passive activity" for which losses are
disallowed. Additionally, respondent determined that petitioner
is not entitled to the real estate rental loss claimed for 1994
because his rental activity is a passive activity and he was not
a real estate professional engaged in a "real property business"
for the year.
Under section 469(a), if a taxpayer is an individual, the
"passive activity loss" for the taxable year shall not be
allowed. The term "passive activity loss" means the amount by
which "the aggregate losses from all passive activities" exceed
"the aggregate income from all passive activities" for the
taxable year. Sec. 469(d)(1). Except for taxpayers entitled to
treatment under section 469(c)(7), Special rules for taxpayers in
real property business, the term "passive activity" includes any
rental activity. Sec. 469(c)(2).
Subsection (c)(7), governing taxpayers in a real property
business, was added to section 469 as part of the Revenue
Reconciliation Act of 1993, Pub. L. 103-66, secs. 13001,
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