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the hours reflected in the document do not appear reasonable.
For example, one entry states that Mrs. Hanna and Mr. Hanna
spent a total of 80 hours preparing their Schedule E and Form
4562, Depreciation and Amortization, for their 1999 Federal
income tax return. Considering that petitioners owned only two
rental properties in 1999, this estimate appears excessive. We
are also skeptical that Mrs. Hanna spent an average of 10
minutes to read and respond to an e-mail or to pay a bill.
Finally, the discrepancy between the figures reflected in the
narrative summary and those in the document titled “Susan
Hanna’s Activity for Year 2000” casts further doubt on the
process by which petitioners calculated Mrs. Hanna’s rental
activities hours.
We conclude that the method petitioners used to calculate
Mrs. Hanna’s participation in the rental activities constitutes
an impermissible “ballpark guesstimate”. See, e.g., Fowler v.
Commissioner, T.C. Memo. 2002-223. Petitioners have not
established by reasonable means that Mrs. Hanna performed more
than one-half of her personal services in real property trades
or businesses in 2000.1 Because Mrs. Hanna did not qualify as a
1 Petitioners argue that although Mrs. Hanna was paid for
2,119 hours of employment, she worked only 1,850 hours. They
attribute the difference to paid vacation, severance pay, and
“billing for hours not really worked”. Even if we accepted the
1,850-hour figure, our conclusion would not change because
petitioners’ method of calculation would still be an
impermissible “ballpark guesstimate”. Furthermore, while Mrs.
(continued...)
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Last modified: May 25, 2011