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The transactions involve payments made by the Museum for
repairs to artwork owned by petitioner. In each case, petitioner
was out of town when the transactions occurred. As noted supra,
employees of the Company performed accounting services for the
Museum. While petitioner was out of town, checks were issued
from the Museum's bank account for services rendered to repair
petitioner's artwork. Petitioner's daughter learned of the
transactions a day or two after they occurred and corrected them
immediately by having petitioner reimburse the Museum.
A third transaction at issue involves a $3,000 payment made
by the Museum to Form, Inc. Form, Inc., is an association of
artists who create large stone sculptures. The payment relates
to art exhibition expenditures made pursuant to a contract with
Form, Inc. However, the Company is the named party in the
contract with Form, Inc., not the Museum.
OPINION
Issue 1. Leasing of Building Spaces
The first issue for decision involves whether the income
received from the Museum's leasing of building spaces to members
of the community constitutes unrelated business taxable income
(UBTI). Respondent determined in the notice of deficiency that
the leasing4 revenues received by the Museum constitute income
4For simplicity, we refer to the revenue from special events
as "leasing" revenue. We use the term "leasing" as a label only
and offer no opinion on whether this income constitutes rent from
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Last modified: May 25, 2011