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provides access to all areas of the building including the areas
used for the art gallery as well as for petitioner's residence.
There is no door at the bottom or top of the stairs leading
to petitioner's residence preventing access to the residence from
the rest of the building. Although petitioner placed a "private"
sign on the stairway leading up to his residence, there are no
permanent dividing walls or partitions separating the residence
from the art gallery.
The property upon which the building is located is subject
to a single deed. Similarly, there is a single real estate tax
assessment for the property and one sewage and water bill. There
were separate telephone lines for the art gallery and
petitioner's residence. Electricity and natural gas usage were
also metered and billed separately.
Petitioner incorporated FOTA Gallery, Inc. (FOTA) in 1986.
FOTA's purpose was to own and operate the art gallery, which it
did during the years in issue. Without a lease, or any other
formalities, it appears that petitioner allowed FOTA to use the
street and basement levels of the building for the operation of
the art gallery.2 FOTA held its first art show in 1987.
2A real estate settlement statement introduced into evidence
as one of respondent's exhibits indicates that FOTA, rather than
petitioner, was the purchaser of the building. Petitioner signed
this settlement statement on behalf of FOTA as president of the
corporation. Contrary to the settlement statement, the
stipulation of facts included the following paragraph: "The
petitioner purchased a three level structure. * * * The
structure was purchased by petitioner on December 4, 1986."
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