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petitioner wife materially participated in the nonrental
activity. See sec. 469(c)(1), (h)(1).
In conclusion, we find that the payments the attorney-
tenants paid to AGI were principally for the use of the
extraordinary personal services, and that the property leasing
was incidental to the services AGI offered. Having also
determined that petitioners materially participated in the
leasing activity, we find that AGI’s activities are not passive
activities. AGI’s losses therefore are nonpassive and may be
netted with AGI’s other income.
In reaching our holding, we have considered all arguments
made, and, to the extent not mentioned, we conclude that they are
moot, irrelevant, or without merit.
To reflect the foregoing,
Decision will be entered
for petitioners.
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