In the following set of problems, determine whether or not the taxpayer(s) \"mat

Question

In the following set of problems, determine whether or not the taxpayer(s) "materially participates" for purposes of IRC §469. If the taxpayer(s) does not materially participate, determine, in the alternative, if the taxpayer(s) "significantly participate"

Frank has an interest in a partnership that feeds and sells cattle. The general partner of the partnership periodically mails Frank a letter setting forth certain proposed actions and decisions with respect to the cattle-feeding operation. Such actions and decisions include, for example, what kind of feed to purchase, how much to purchase, when to purchase it, how often to feed cattle and when to sell cattle. The letters explain the proposed actions and decisions, emphasize that taking or not taking a particular action or decision is solely within the discretion of Frank and other partners, and ask Frank to indicate a decision with respect to each proposed action by answering certain questions. The general partner receives a fee for such services.

Explanation / Answer

Based on the facts and circumstances that Frank has an interest in the partnership that feeds and sells cattle and make every decision for every action involved in the business ,he "materially particpates "for purposes of Temp Reg §1.469-5T(a)(7).

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