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Respondent agrees that petitioner owned more than 5 percent of
United Air Temp in 1994 and 1995 and satisfies the requirements
of section 469(c)(7)(D)(ii). Thus, petitioner can include
personal services performed as an employee of United Air Temp
provided that such activities are related to real property trades
or businesses. However, respondent argues that petitioner’s
activities as an employee of United Air Temp are not all related
to real property trades or businesses.
Real property trades or businesses are defined in section
469(c)(7)(C) as “any real property development, redevelopment,
construction, reconstruction, acquisition, conversion, rental,
operation, management, leasing, or brokerage trade or business.”
A trade or business includes being an employee. Putoma Corp. v.
Commissioner, 66 T.C. 652, 673 (1976), affd. 601 F.2d 734 (5th
Cir. 1979).
We need not decide whether petitioner’s personal services as
an employee of United Air Temp are related to a real property
trade or business or whether United Air Temp is a real property
trade or business because petitioner has not established by
reasonable means that petitioner spent more than 750 hours in
real property trades or businesses.
“Personal Services” generally means “any work performed by
an individual in connection with a trade or business”.
Sec. 1.469-9(b)(4), Income Tax Regs. Work done by an individual
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