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the individual's aggregate participation in all significant
participation activities during such year exceeds 500 hours; (5)
the individual materially participated in the activity for any 5
taxable years (whether or not consecutive) during the 10 taxable
years that immediately precede the taxable year; (6) the activity
is a personal service activity, and the individual materially
participated in the activity for any 3 taxable years preceding
the taxable year; or (7) based on all of the facts and
circumstances, the individual participated in the activity on a
regular, continuous, and substantial basis during such year.
Sec. 1.469-5T(a), Temporary Income Tax Regs., 53 Fed. Reg. 5725
(Feb. 25, 1988).
In determining whether a taxpayer "materially participated"
in an activity, the participation of a spouse shall be taken into
account. Sec. 469(h)(5).
Respondent determined that petitioners did not materially
participate in the cattle activity and that petitioners' business
losses therefore constitute passive activity losses. Petitioners
contend that they participated in the activity for more than 500
hours (Test 1), or for more than 100 hours during the taxable
year, and that their participation was not less than the
participation in the activity of any other individual (Test 3).
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