- 12 -
however, and we therefore conclude that they have abandoned it.
Lunsford v. Commissioner, 117 T.C. 183, 187 (2001); Nicklaus v.
Commissioner, 117 T.C. 117, 120 n.4 (2001).
Even if we didn’t, the argument lacks merit. To be a real
estate professional under section 469(c)(7), the taxpayer must
(among other requirements) have “materially participate[d]” in
real estate trades or businesses for at least 750 hours in the
tax year. Sec. 469(c)(7)(B)(ii). But “material participation”
has the same meaning here as described above. See sec. 1.469-
9(b)(5), Income Tax Regs. So the time Mrs. Lapid spent on
investment activities would still not count toward the 750-hour
requirement. We therefore find in the alternative that she is
not a real estate professional for purposes of section
469(c)(7).4
As the petitioners brought up no other arguments,5 we find
that the nonhotel properties are a passive activity and any
4 And even if Mrs. Lapid were a real estate professional
for purposes of section 469(c)(7), we would have to consider
each of her real estate rental activities separately, sec.
469(c)(7)(A)(ii), unless she elected to combine them into a
single activity, sec. 1.469-9(g)(1), Income Tax Regs. As we find
that Mrs. Lapid is not a real estate professional, these rules do
not apply, and we need not consider whether she made the required
election.
5 While petitioners brought up no other arguments,
respondent did mention section 469(i) on brief. This section
allows a maximum $25,000 deduction for passive activity losses
connected with rental real estate. Petitioners, however, fail
to qualify for this deduction because their modified adjusted
gross income (i.e., their adjusted gross income computed without
regard to their claimed losses) was too high.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 Next
Last modified: May 25, 2011