- 14 - respondent contends that petitioner wife’s estimate was neither reasonable nor reliable. Petitioner wife counters that she still performs the same activities, which are at issue in this case, so the computations of time were not based on distant memories. Based on testimony regarding petitioner wife’s onsite management of AGI’s employees, petitioner wife contends she has adequately satisfied the requirement that she materially participated in the nonrental activity. We have no doubt that petitioner wife spent substantial time on the leasing activities and legal support services. Although this Court has not always accepted a post-event narrative of participation, we find petitioner wife’s description of her participation, when combined with witness testimony and the objective evidence in the record, to be credible, and we therefore conclude that petitioner wife materially participated in the activity by participating for more than 500 hours during the year. See Harrison v. Commissioner, T.C. Memo. 1996-509. Accordingly, petitioners have satisfied their burden of showing 10(...continued) not require an analysis under the real estate professional exception, we apply respondent’s argument to whether petitioner wife materially participated in the nonrental activity. Moreover, Shaw is distinguishable from the present case because many of the hours the taxpayer alleged to have spent materially participating in the passive activity in Shaw were in fact “investor type activities”, which are not includable unless the individual is directly involved in the day-to-day management or operations of the activity. Sec. 1.469-5T(f)(2)(ii)(A), Temporary Income Tax Regs., 53 Fed. Reg. 5727 (Feb. 25, 1988). As we have shown, petitioner wife daily participated in the management and operations of the activity.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Next
Last modified: May 25, 2011