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observe correctly that both the legislature and the judiciary
have referred to the combating of “tax shelters” as one of the
reasons for the enactment of section 469, we, unlike petitioners,
do not read that term to require a finding of a specific intent
to reduce taxes. Instead, we read that term plainly in the
context of the setting at hand to include any transaction that,
but for the recharacterization rule, would allow taxpayers to use
passive losses to offset rental income received from a wholly
owned business in which they actively participate.
We hold once again that the recharacterization rule is
valid. In so doing, we have considered all of petitioners’
arguments for a contrary holding and, to the extent not discussed
above, find those arguments to be without merit or irrelevant.
To reflect the foregoing,
An appropriate order will
be issued.
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Last modified: May 25, 2011