As of now, I'm remaining neutral on whether the 7-day-or-less being non-passive or not (assuming Material Participation).
While I agree the law says that Regulation is expired, I'm unsure if there are other provisions that still allow some authority to it. The fact that it is still in the IRS Publication MIGHT indicate there is some legal authority to it still, even if the authority is not as 'high' as a Regulation (but at Tagteam mentioned, the Publication itself has no legal authority). Or the fact it is in the Publication could just mean the IRS has not closely looked at that Publication for quite a while.
