In Hairston v. Commissioner (T.C. Memo 2019-104, filed August 20, 2019), a Maryland couple produced calendars recording no more than 932 hours of work on two rental houses, attributed 781 of them to the husband, and lost anyway. The Tax Court found the recorded hours "inflated by at least 150 hours, most likely more," which put him below the 750 hours needed for real estate professional status under IRC §469(c)(7). The number on the log was above the threshold. The log itself was not believed. The reasons the court gave apply to any hours log, including a short-term rental owner's 100-hour log.
The numbers
The Hairstons owned two adjacent single-family rentals in Glenn Dale, Maryland, and lived in the house next door. Both were long-term rentals. One tenant stayed all of 2014; the other was evicted in October, and the house sat vacant until a new lease was signed on December 19.
Mrs. Hairston worked full time for the Department of Homeland Security and handled the books, deposits, advertising and leases. Mr. Hairston had retired before 2014 and handled upkeep, doing some of it himself and hiring contractors for major work. Their 2014 Schedule E showed a $27,488 loss across the two properties, which they deducted against ordinary income. The IRS disallowed it as passive.
Because the couple conceded they could not combine their hours to reach 750, the case turned on Mr. Hairston alone. The IRS allocated 669 recorded hours to him, 170 to his wife, and 93 to either; putting all the uncertain hours on his side gave 762. The couple argued for 781. The court assumed the best case, 781, and still found the burden of proof unmet. The opinion is on the Tax Court's docket system at ustaxcourt.gov, docket 20372-17.
Defect 1: everything took at least an hour
The court's first observation was about the shape of the entries. Every task on the calendars, "no matter how trivial," was recorded as taking at least one hour. Of 360 entries, 121 recorded exactly one hour. The opinion lists them:
- 36 entries for receiving a rent payment, issuing a receipt, or depositing a check.
- 13 one-hour entries for "paying mortgage."
- 11 one-hour entries for "hunting down" or reminding the tenant to pay rent, three of them in the same week and two on the same day.
- 9 one-hour entries for "inspecting vacant property," which the court described as walking next door to make sure the house had not been broken into.
Depositing a check is real work. The problem was the duration. A deposit does not take an hour, and thirteen mortgage payments do not take thirteen hours. The court said this "pattern of inflating recorded hours undermines the credibility of petitioners' calendars overall." The one-hour entries did not just lose their own minutes; they cost the rest of the log its credibility.
Defect 2: watching contractors work
Mr. Hairston supervised the contractors who replaced carpet and painted the interior of the vacant house. He testified that he met them at the house and stayed until they finished, but did not participate in the work. The calendars recorded 33 hours while carpet was installed and cleaned, and 40 hours in one December week "supervising" the painters.
The court's response has become the line the case is known for: "we cannot believe that he spent an entire week watching paint dry." Even assuming he was on the premises every moment, the court found that little of that time was "work performed" within the meaning of Treas. Reg. §1.469-9(b)(4). He was not there at a tenant's request, the house was vacant, and the couple could not explain why he needed to be on site for 40 hours. At best he was "on call" to answer questions and lock up, and on-call hours do not count because no services have in fact been performed. The court cited Moss v. Commissioner (135 T.C. 365) for that rule, the same authority the Tax Court applied to an STR owner's "on call" block in Mirch (T.C. Memo 2025-128).
Defect 3: routine tasks out of proportion
The calendars recorded between 93 and 105 hours of snow removal for the year. The court found two problems. First, the leases the couple had drafted made the tenants responsible for keeping the paths clear, so the owners had no obligation to do it. Second, a third of the hours, 31 in February, fell in a five-day span: 13 hours "preparing for snowstorm," 15 hours removing snow, and 3 hours deicing.
At trial the explanation was the long driveway to a six-car garage. But the tenants had no meaningful right to use that garage; the Hairstons parked their own vehicles in it and stored Mr. Hairston's tools there. The court inferred that most of the driveway clearing was for the owners' own benefit. The hours may well have been spent. They were not spent on the rental business.
Defect 4: written up later, in one hand
The opinion also records how the calendars were kept. Each entry described a task and the hours, without saying which spouse did it. The handwriting on all entries "seems identical." Some entries were made on the day, but "most were made at the end of the week or later."
The court did not rule that the calendars were reconstructed; the inflation findings were enough. But the timing and the single hand were part of the record, and they explain how one-hour defaults happen. A person writing on Sunday night about Tuesday reaches for a round number. A person logging on Tuesday writes down what the deposit actually took. The reconstructed vs contemporaneous guide covers why courts treat the two differently.
What the case did not decide
First, Hairston is a real estate professional case about the 750-hour test in IRC §469(c)(7), not a short-term rental case; the IRS did not dispute material participation or the couple's grouping election. Its lessons apply to STR logs by analogy, because the credibility standard is the same. The court restated it from Treas. Reg. §1.469-5T(f)(4): hours may be proved by any reasonable means, but a "ballpark guesstimate" will not suffice, citing Moss. Second, the court did not find that Mr. Hairston did nothing. It found the log overstated by at least 150 hours from a claimed 781, and that was enough to fall below 750. See the 750-hour test guide for how the two REPS prongs work.
The lesson for STR hosts specifically
The 100-hour test in Treas. Reg. §1.469-5T(a)(3) has a smaller threshold than 750, but the credibility standard does not scale down. An STR log has the same pressure points Hairston's did:
- Guest messages logged as "1 hour" each, when most take five minutes.
- Turnovers logged as a standard block regardless of what was done.
- Time at the property while a cleaner or contractor works, logged as supervision.
- Errands that mix personal and rental purposes, logged in full.
- Entries written up at the end of the week from memory.
A log with 150 hours and those patterns is in a worse position than a log with 110 hours of specific, dated, minute-level entries, because the examiner's argument in the first case is the court's argument in Hairston: if the small entries are inflated, why believe the large ones?
Five self-checks to run on your log tonight
- Sort by duration. If a large share of entries are exactly 60 minutes, or exactly any round number, ask what each one actually took and fix the ones you can still remember. STR Tracker records durations to the minute rather than in hour blocks, which makes this pattern visible before anyone else sees it.
- Find the spectator hours. Any entry where someone else did the work while you were present: reduce it to the time you actually spent scoping, deciding, inspecting or letting them in.
- Check whose benefit. Clearing your own driveway, stocking your own garage, or maintaining an area guests do not use is not rental work, however long it took.
- Compare creation date to activity date. Entries written days later deserve a second look for round numbers.
- Name the person. Every entry should say who did it. Hairston's calendars did not.
A log that passes these five checks may show fewer hours. Fewer hours a court believes are worth more than a larger number it does not. If you keep a spreadsheet, the free log template has a minutes column and a "who" column for this reason.