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petitioner obtained a revocable permit to use the property as a
photo processing lab as the tenant of the American Red Cross.
Petitioner paid all the expenses required to obtain the revocable
permit.
Mr. Cummings sublet the 4200 S.W. Corbett St. property to
petitioner before the years in issue. Petitioner spent about
$1,000,000 to adapt the property for its use. Petitioner paid
for insurance, maintenance, utilities, and other similar costs.4
Petitioner paid rent of $216,000 to Mr. Cummings for fiscal
year 1989, $250,000 for 1990, and $264,000 for 1991.
Mr. and Mrs. Cummings deducted rent of $97,975 in 1988 and
1991, and taxes of $64,378 for 1988 and $90,626 for 1991. Mrs.
Cummings deducted rent of $97,975 for 1989 and 1990, and taxes of
$61,086 for 1989 and $101,048 for 1990. In 1994, Mr. Cummings
paid about $100,000 to repair the roof and dry rot damage and to
remove an oil tank.
4 Petitioner contends that Blackstone paid real property
taxes for the 4200 S.W. Corbett St. property. Petitioner relies
on Exh. 20, which consists of copies of checks written by The
Blackstone Co. from Feb. 14, 1989 to Nov. 14, 1991, and a memo to
the file from petitioner's counsel dated Oct. 3, 1994, pertaining
to tax accounts associated with particular pieces of property.
Petitioner did not provide Exh. 20 to respondent in the time
required by the Court's standing pretrial order. The parties
stipulated that the information in the exhibit pertaining to tax
accounts for the particular pieces of property is based on
inadmissible hearsay. Thus, we do not consider Exh. 20.
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