William C. and Cheryl M. Fowler - Page 6




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          Petitioner’s estimate of the hours that he spent on real                    
          estate rental activities is as follows:                                     
                                               1994        1995                       
                  New York property        456.0        409.0                         
                  Apartment building       229.0        --                            
                  Commercial building      163.5        17.0                          
                  Florida property         357.0        336.5                         
                  Travel                   280.0        210.0                         
                  Administrative            70.0         80.0                         
                  Total                    1,555.5      1,052.5                       
               Mrs. Fowler performed administrative services related to the           
          rental properties.  She reviewed mail and invoices, made deposits           
          of rental income, prepared accounting records, prepared checks to           
          pay rental expenses, filed business records, maintained and                 
          backed up computerized accounting records, compared actual                  
          expenses with budgeted expenditures, and met with the certified             
          public accountant in connection with the preparation of income              
          tax returns.  Mrs. Fowler did not keep a calendar or a log of the           
          hours that she spent performing these activities, but she                   
          estimated that she spent about 600 hours a year on these                    
          administrative tasks.                                                       
               Petitioners used the services of independent contractors to            
          assist in the management and maintenance of the rental                      
          properties.  Petitioners hired a manager for the apartment                  
          building.  The manager was responsible for answering telephone              
          calls, collecting rents, and depositing the monthly checks.  The            
          manager was paid a percentage of the money that she collected.              






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