Walter L. Medlin - Page 1

                                 T.C. Memo. 2003-224                                  


                               UNITED STATES TAX COURT                                


                           WALTER L. MEDLIN, Petitioner v.                            
                    COMMISSIONER OF INTERNAL REVENUE, Respondent                      


               Docket No. 2615-98.              Filed July 29, 2003.                  

               David D. Fussell and Mark L. Horwitz, for petitioner.                  
               James F. Kearney, Benjamin A. de Luna, and Robert W.                   
          Dillard, for respondent.                                                    


                       MEMORANDUM FINDINGS OF FACT AND OPINION                        

                                      CONTENTS                                        
          GENERAL FINDINGS OF FACT  . . . . . . . . . . . . . . . . .   6             
                                                                                     
          General Legal Principles  . . . . . . . . . . . . . . . . .  20             
          I.  Items of Income   . . . . . . . . . . . . . . . . . . .  21             
               A.  Rents Received From Island Livings, Inc. in 1988 .  22             







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