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The temporary regulations provide six exceptions to the
definition of rental activity.13 See sec. 1.469-1T(e)(3)(ii)(A)
through (F), Temporary Income Tax Regs., 53 Fed. Reg. 5702 (Feb.
25, 1988). Those exceptions are: (1) The average use of the
property by customers is 7 days or less; (2) the average period
of customer use is 30 days or less, and significant personal
services are provided by or on behalf of the owner; (3)
extraordinary personal services are provided by the owner in
connection with making the property available for use by
customers; (4) the rental of the property is incidental to a
nonrental activity of the taxpayer; (5) the taxpayer customarily
makes the property available during defined business hours for
nonexclusive use by various customers; or (6) the property is
provided by a partner or S corporation shareholder to his
partnership or S corporation. Id. Given the stipulated record,
we glean from petitioners’ brief that their argument is trained
upon the third and fourth exceptions listed above.14
13The regulations were prescribed by the Commissioner under
the broad regulatory authority delegated to him by Congress
through sec. 469(l)(1).
14Clearly, since the lease agreement by and between
petitioners and Pauline’s Concrete is exclusive, for a term of 10
years, and Pauline’s Concrete was a C corporation, the other
enunciated exceptions cannot apply.
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