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Exception for Significant Personal Services
The parties agree that petitioners are entitled to claim the
disputed $16,703 loss from their condominium units at the Summit
as nonpassive on their Federal income tax return for 2000 only
if: (1) Petitioners' condominium activity is described in
section 1.469-1T(e)(3)(ii), Temporary Income Tax Regs., 53 Fed.
Reg. 5702 (Feb. 25, 1988); and (2) petitioners meet one of the
material participation tests of section 1.469-5T(a), Temporary
Income Tax Regs., 53 Fed. Reg. 5725 (Feb. 25, 1988).
Section 1.469-1T(e)(3)(ii)(B), Temporary Income Tax Regs.,
supra (B exception) provides that an activity generating payment
for the use of tangible personal property is not rental activity
(and therefore not per se passive) if the average period of
customer use is 30 days or less and "significant personal
services" are provided by or on behalf of the owner of the
property in connection with making it available for customer use.
Petitioners contend that they fall within the B exception.
Certain services are "excluded services" and are not
considered in determining whether significant personal services
are performed. Section 1.469-1T(e)(3)(iv), Temporary Income Tax
Regs., supra. Services necessary to permit the lawful use of the
property, and certain construction and repair services are
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