Carolyn D. Fenderson - Page 11

                                       - 10 -                                         
               Next we turn to the personal services performed by                     
          petitioner in real estate trades or businesses in which she                 
          materially participated.                                                    
               For purposes of section 469, a taxpayer materially                     
          participates in an activity only if the taxpayer is involved in             
          the operation of the activity on a basis which is regular,                  
          continuous, and substantial.4  Sec. 469(h)(1).  We are satisfied            
          that with respect to each real estate activity involving a rental           
          unit, petitioner’s “participation in the activity for the taxable           
          year constitutes substantially all of the participation in such             
          activity of all individuals (including individuals who are not              
          owners of interests in the activity) for such year”.  Sec. 1.469-           
          5T(a)(2), Temporary Income Tax Regs., 53 Fed. Reg. 5725 (Feb. 25,           
          1988).  Consequently, for purposes of section 469, petitioner may           
          be treated as having materially participated in the operation of            
          each of the rental units, and we proceed as though she did.5                

               4  Circumstances that, in and of themselves, establish                 
          material participation in a given activity can be found in sec.             
          1.469-5T(a), Temporary Income Tax Regs., 53 Fed. Reg. 5725 (Feb.            
          25, 1988).                                                                  
               5  Argument could be made that for purposes of sec. 469, a             
          taxpayer’s participation in an activity is not treated as                   
          “regular, continuous, and substantial” during any year if the               
          individual participates in the activity for 100 hours or less               
          during that year.  See Oberle v. Commissioner, T.C. Memo. 1998-             
          156; sec. 1.469-5T(b)(2)(iii), Temporary Income Tax Regs., 53               
          Fed. Reg. 5726 (Feb. 25, 1988).  Under the circumstances we need            
          not decide the point.                                                       

Page:  Previous  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  Next 

Last modified: March 27, 2008