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purposes of section 179, the Secretary prescribed in section
1.179-2(c)(6), Income Tax Regs., the following relevant rules as
to the meaning of the phrase:
(6) Active conduct by the taxpayer of a trade
or business--(i) Trade or business. For purposes of
this section and � 1.179-4(a), the term “trade or
business” has the same meaning as in section 162 and
the regulations thereunder. * * *
(ii) Active conduct. For purposes of
this section, the determination of whether a trade or
business is actively conducted by the taxpayer is to be
made from all the facts and circumstances and is to be
applied in light of the purpose of the active conduct
requirement of section 179(b)(3)(A). In the context of
section 179, the purpose of the active conduct
requirement is to prevent a passive investor in a trade
or business from deducting section 179 expenses against
taxable income derived from that trade or business.
Consistent with this purpose, a taxpayer generally is
considered to actively conduct a trade or business if
the taxpayer meaningfully participates in the
management or operations of the trade or business. * *
* A mere passive investor in a trade or business does
not actively conduct the trade or business.
Second, for purposes of section 355, the Secretary
prescribed in section 1.355-3(b)(2), Income Tax Regs., the
following relevant rules as to the phrase’s meaning:
(2) Active conduct of a trade or business
immediately after distribution--(i) In general. For
purposes of section 355(b), a corporation shall be
treated as engaged in the “active conduct of a trade or
business” immediately after the distribution if the
assets and activities of the corporation satisfy the
requirements and limitations described in paragraph
(b)(2)(ii), (iii), and (iv) of this section.
(ii) Trade or business. A corporation
shall be treated as engaged in a trade or business
immediately after the distribution if a specific group
of activities are being carried on by the corporation
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