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Material Participation
Even if petitioners’ income is not attributable to property
leased under a written binding contract entered into before
February 19, 1988, petitioners argue that a portion of the income
is nevertheless passive income because petitioner was not a
material participant in BMS. Respondent objects to petitioners’
argument, asserting that petitioners have not properly raised
this issue before the Court and that, in any case, petitioners
have failed to establish that the 1203 Partnership’s lease
relationship with BMS constitutes a separate activity from its
lease relationship with the PC.
Rule 34 requires that the petition contain clear and concise
assignments of each and every error alleged and statements of
facts on which petitioner relies to sustain each assignment of
error. See Rule 34(b)(4) and (5). The purpose underlying the
Court’s pleadings requirements is to give the parties and the
Court fair notice of the matters in controversy. See Rule 31(a).
Generally, issues not raised in the assignments of error in the
petition are deemed conceded. See Rule 34(b)(4). Nevertheless,
it is within the discretion of the Court to determine whether
considerations of surprise and prejudice require that a party be
protected from having to face a belated confrontation which
precludes or limits that party’s opportunity to present pertinent
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