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to support his assertion that he was a real estate professional
pursuant to section 469(c)(7) in either 1995 or 1996 or to
support a finding that he materially participated in each of the
real estate properties.
Under section 469(c)(7)(B), a taxpayer qualifies as a real
estate professional and is not engaged in a passive activity
under section 469(c)(2) if:
(i) more than one-half of the personal services
performed in trades or businesses by the taxpayer
during such taxable year are performed in real property
trades or businesses in which the taxpayer materially
participates, and
(ii) such taxpayer performs more than 750 hours of
services during the taxable year in real property
trades or businesses in which the taxpayer materially
participates.
Thus, if the taxpayer qualifies as a real estate
professional, the rental activities of the real estate
professional are exempt from classification as a passive activity
under section 469(c)(2). Instead, the real estate professional’s
rental activities are treated as a passive activity under section
469(c)(1) unless the taxpayer materially participated in the
activity. Sec. 1.469-9(e)(1), Income Tax Regs. For purposes of
determining whether a taxpayer materially participated in a trade
or business, this requirement must be met with respect to each
interest in rental real estate unless the taxpayer makes an
election to treat all interests in rental real estate as a single
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