- 16 -
Because petitioner does not qualify as a real estate
professional under section 469(c)(7), petitioners’ real estate
rental activities are treated as per se passive activities under
section 469(c)(2) regardless of material participation by
petitioners. See sec. 469(c)(4). Thus, we need not decide
whether petitioners materially participated in each real estate
rental activity. Even if petitioner were a real estate
professional under section 469(c)(7), petitioners would not meet
the material participation requirements of section 1.469-5T(a),
Temporary Income Tax Regs., 53 Fed. Reg. 5725 (Feb. 25, 1988),
based on the following considerations. Petitioners did not elect
to aggregate their real property rental activities and must show
that they meet the material participation requirements with
respect to each real estate rental property. Petitioners rely on
the same calendars, estimates of their travel time, and their
personal testimony to prove the hours that they worked on each of
their real estate rental properties. Petitioners retained a
manager for their apartment building and utilized the services of
independent contractors to maintain their rental properties.
Petitioners’ travel to their Florida property of 168 hours and
84 hours in 1994 and 1995, respectively, appears also to be
personal trips to stay at another Florida property owned by
petitioners. Petitioners did not spend more than 100 hours on
Page: Previous 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 NextLast modified: May 25, 2011