The example in the reg seemed to me to be unrealistic (a portion of the example):
"With this rule, each of the stockholders in this example would be required to establish that their respective contribution of active personal management was made on a regular basis, and was identifiable and documentable as separate and distinct from the other stockholders of the entity. For example, stockholder BI wouldn't own shares in a corporation where there was more than one manager. Of course, I've no experience in this area so my opinion is worth less than nothing. I might guess, however, one problem is married couples, where you might expect to have some joint management. But writing regulations which distinguish a married couple from a legal entity is difficult (not to mention the reality of unmarried couples, straight and gay).
could represent through copies of signed purchase orders that stockholder B was individually responsible for obtaining and purchasing all inputs for the farming operation on behalf of the Corporation. Stockholder C could represent through signed contracts and delivery agreements with grain elevators and a cotton gin that stockholder C was individually responsible for the marketing of all commodities produced by the Corporation’s farming operation. Stockholder D could represent through copies of payroll records that stockholder D was individually responsible for the supervision of all hired labor utilized by the Corporation’s farming operation."