Paul and Pauline D. Kessler - Page 8

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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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