Zacarias Lapid and Ma Delaila Lapid - Page 10

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          did indeed spend a lot of time tracking her properties.                     
          Regardless of whether we believe Mrs. Lapid’s testimony (or think           
          it “vague, uncorroborated, and self-serving”), we cannot consider           
          the vast majority of the hours she spent monitoring her                     
          investments in deciding whether she was a material participant.             
               Unable to count the hours that Mrs. Lapid spent on                     
          investment activity,3 the petitioners’ claim to the loss on their           
          hotel condos quickly collapses.  Though we believe that the                 
          Lapids did at least occasionally visit the condos, the record is            
          devoid of any evidence that they spent anywhere near 500 hours              
          doing so.  That the hotels did the routine onsite work of                   
          property management undermines the Lapids’ ability to show any              
          significant amount of time that would count as “participation” in           
          the activity.  And they completely failed to compare the time               
          they spent with the time spent by individuals actually onsite.              
               Petitioners do claim, based on all the facts and                       
          circumstances, that Mrs. Lapid participated in the activity on a            
          regular, continuous, and substantial basis during the year.  See            
          sec. 1.469-5T(a)(7), Temporary Income Tax Regs., supra at 5726.             
          The regulations state that the taxpayer’s hours spent on                    
          management can count under this test only if no other person is             


               3 While the regulations permit us to include Mr. Lapid’s               
          time on these activities, sec. 1.469-5T(f)(3), Temporary Income             
          Tax Regs., supra at 5727, petitioners presented no evidence that            
          he spent any time on them beyond performing minor repairs.                  





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