The Tax Court Sided With the Taxpayer on the Passive Activity Loss Limitations

The tax court sided with the taxpayer on this, and said that they accept the taxpayers claim that most of the trips to the property were for upkeep. They also excluded the time that the taxpayer spent driving between the Sea Ranch property and his Sacramento home. The log itself is not reliable and therefore is not reasonable means of establishing material participation hours. It effectively amounts to ballpark guesstimates and does not establish that the taxpayer spending 100 hours on the short-term rental activities during the year.

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