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provide a sufficient number of hours to meet the 750-hour
participation requirement.
Because petitioner does not meet the 750-hour requirement of
section 469(c)(7)(B)(ii), he is not a real estate professional
for purposes of section 469(c)(7)(A), and his real estate rental
activities are treated as passive activities under section
469(c)(2). As such, it is not necessary for us to address
whether petitioner spent more than 50 percent of his time in real
estate trades or businesses or whether he materially participated
in each real estate rental. Even so, the lease agreements
executed by petitioner would not require much involvement by
petitioner during the lease term because the leased premises
included the land, building, fixtures, and equipment, and the
lessee was required to repair and maintain the property.
Further, Kellum was responsible for the repairs and maintenance
of the properties leased to Shaw’s Gulf, and petitioner hired an
agency to manage the residential rentals.
Airplane Lease Activity
Respondent disallowed the airplane rental losses of $355,147
and $255,096 in 1995 and 1996, respectively, and maintains that
the leasing of personal property is a passive activity under
section 469(c)(2) and subject to the passive activity loss
limitations under section 469.
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