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regulations are vague, they do not allow a post-event “ballpark
guesstimate”. Fowler v. Commissioner, T.C. Memo. 2002-223.
In testimony and exhibits, petitioner wife produced credible
evidence to establish that she met the requisite time
requirements. Higbee v. Commissioner, 116 T.C. 438, 442 (2001).
Petitioner wife did not comply, however, with respondent’s
reasonable request to view redacted law practice time sheets.
Accordingly, we find that section 7491 does not shift the burden
of proof to respondent. Petitioners therefore bear the burden of
proving by a preponderance of the evidence that they qualified
for an exception to the definition of a rental activity.
Extraordinary Personal Services
We address next whether petitioners qualify for the
extraordinary personal services exception. To qualify for the
extraordinary personal services exception, petitioners must prove
that the activity was not a “rental activity” under section
469(j)(8). In so doing, petitioners must prove that the use by
customers of AGI’s real property was incidental to their receipt
of AGI’s services.6 Sec. 1.469-1T(e)(3)(ii)(C), Temporary Income
Tax Regs., supra at 5702.
Very little guidance exists on the meaning of
“extraordinary” personal services, and no reported case by this
6The extraordinary personal services exception is separate
from another exception, not at issue here, where the rental of
property is “incidental to” a nonrental activity. See sec.
1.469-1T(e)(3)(ii)(D), Temporary Income Tax Regs., 53 Fed. Reg.
5702 (Feb. 25, 1998). Unlike the extraordinary personal services
exception, this exception involves a computational analysis. See
sec. 1.469-1T(e)(3)(vi); compare sec. 1.469-1T(e)(3)(v),
Temporary Income Tax Regs., supra.
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