- 7 -
With respect to the evidence that may be used to establish
material participation, temporary Treasury regulations
promulgated under section 469 provide:
The extent of an individual’s participation in an
activity may be established by any reasonable means.
Contemporaneous daily time reports, logs, or similar
documents are not required if the extent of such
participation may be established by other reasonable
means. Reasonable means for purposes of this paragraph
may include but are not limited to the identification
of services performed over a period of time and the
approximate number of hours spent performing such
services during such period, based on appointment
books, calendars, or narrative summaries.
Sec. 1.469-5T(f)(4), Temporary Income Tax Regs., 53 Fed. Reg.
5727 (Feb. 25, 1988); see also sec. 1.469-9(b)(5), Income Tax
Regs. This Court has acknowledged that these temporary
regulations are somewhat ambivalent concerning the records to be
maintained by taxpayers, but we have held that the regulations do
not allow a post-event “ballpark guesstimate”. Fowler v.
Commissioner, T.C. Memo. 2002-223; Goshorn v. Commissioner, T.C.
Memo. 1993-578.
In support of their argument that petitioner was a
qualifying taxpayer under section 469(c)(7)(B) for 2001,
petitioners failed to substantiate the amount of time petitioner
spent on his rental real estate activities relative to his full-
time job at the Dial Corporation. Deductions are a matter of
legislative grace, and petitioners bear the burden of proving
that they are entitled to any of the deductions claimed. Rule
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 Next
Last modified: May 25, 2011