- 17 -
film, chemicals, dyes, and nuclear materials are used in
radiological diagnostic procedures. Anesthetic gases are
administered to patients during surgery. Oxygen is administered
to patients by the respiratory therapy department. Dyes are
injected in patients with possible coronary artery disease during
the diagnostic procedure known as cardiac catheterization.
Petitioners' Purchases of Supplies
Petitioners' hospitals purchase medical supplies and medical
equipment for use in the treatment of patients. They purchase
some of those items from their suppliers (usually the
manufacturer of the items) at discounts not available to
wholesalers, retailers, or resellers of such items. Most of the
pharmaceutical supply contracts entered into by petitioners'
hospitals prohibit the resale of pharmaceuticals by the hospitals
and limit the hospitals’ purchases to items for their own use.
The majority of the medical supplies are physically located
in four departments: The operating room, materials management
and central supply, the pharmacy, and the laboratory. Each
hospital takes physical inventories of its medical supplies at
yearend.
For tax years ended 1982 through 1988, petitioners'
hospitals claimed the following supplies expenses and total
deductions on their consolidated Federal income tax returns:
Page: Previous 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 NextLast modified: May 25, 2011