- 15 -
The legislative history of section 469 states:
furnishing a boat under a bare boat charter * * *
constitutes a rental activity under the passive loss
rule, because no significant services are performed in
connection with providing the property. [S. Rept. 99-
313 (1986), 1986-3 C.B. (Vol. 3) 742.]
Moreover, section 1.469-1T(e)(3)(v), Temporary Income Tax Regs.,
53 Fed. Reg. 5702 (Feb. 25, 1988), provides the following
examples:
the use by patients of a hospital’s boarding facilities
generally is incidental to their receipt of the
personal services provided by the hospital’s medical
and nursing staff. Similarly, the use by students of a
boarding school’s dormitories generally is incidental
to their receipt of the personal services provided by
the school’s teaching staff.
Section 1.469-1T(e)(3)(viii), Example (3), Temporary Income Tax
Regs., 53 Fed. Reg. 5703 (Feb. 25, 1988), further illustrates
this exception:
The taxpayer is engaged in an activity of transporting
goods for customers. In conducting the activity, the
taxpayer provides tractor-trailers to transport goods
for customers pursuant to arrangements under which the
tractor-trailers are selected by the taxpayer, may be
replaced at the sole option of the taxpayer, and are
operated and maintained by drivers and mechanics
employed by the taxpayer. The average period of
customer use for the tractor-trailers exceeds 30 days.
Under these facts, the use of the tractor-trailers by
the taxpayer’s customers is incidental to their receipt
of personal services provided by the taxpayer.
Accordingly, the services performed in the activity are
extraordinary personal services * * * and, * * *
[thus], the activity is not a rental activity.
The underlying purpose of petitioners’ business, as well as
AYC’s business, is to charter Moonshadow. During the years in
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Next
Last modified: May 25, 2011