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the meaning of section 1.469-4(d)(1)(A), Income Tax Regs. If it
is, petitioners may group petitioner’s leasing activity with the
PFC activity, thereby allowing petitioners to categorize as non-
passive, and therefore deduct, the losses incurred by
petitioner’s leasing activity. Because respondent does not
dispute that the two activities are an appropriate economic unit,
we need not address the specific factors enumerated in section
1.469-4(c)(2), Income Tax Regs.
In arguing that the leasing activity was not insubstantial
in relation to the PFC activity, respondent makes several
comparisons between them, highlighting the income, losses, cost
of depreciable assets, and basis of assets in both activities.
In arguing that the leasing activity was insubstantial in
relation to the PFC activity, petitioners focus both on
“quantitative” comparisons similar to those focused on by
respondent, as well as on other “qualitative” factors. See
generally Glick v. United States, 96 F. Supp. 2d 850 (S.D. Ind.
2000).
The parties’ comparison of the value of the assets of each
activity is not determinative under the particular facts of this
case. Merely because the rental activity in this case involved
the rental of assets with high values does not make the primary
trade or business activity less substantial in relation to that
rental activity. Most importantly, a comparison of the value of
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