Mohan Roy, M.D., Inc. - Page 5

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          approximately 17 miles.  The record does not reveal the distance            
          between the corporate office of Roy, Inc., and the other hospitals          
          to which Mohan Roy traveled.                                                
               During the years in issue, Roy, Inc. owned a 1990 Silver Spur          
          II Rolls Royce.  It also owned a 1988 Mercedes Benz S-500 until             
          1993, at which time that automobile was traded in connection with           
          the corporation's leasing a new Mercedes Benz S-500.                        
               Because they worked at different hospitals at different times,         
          the Roys were not able to travel together.  During the years in             
          issue, Vimal Roy generally drove the Mercedes Benz S-500.  The              
          parties agree that the Roys' personal use of the Mercedes Benz S-           
          500 owned by Roy, Inc., during each of the years in issue was 28            
          percent and that the individual petitioners received constructive           
          dividends as a result of such use during each of the years in               
          issue.                                                                      
               The Roys personally owned three automobiles:  A 1990 Lexus             
          400, a Range Rover, and a General Motors pickup truck.  The Range           
          Rover was insured under Roy, Inc.'s policy but was primarily used           
          by the Roys' son who was in medical school.3                                






               3    The purpose of having the Range Rover as well as the              
          Rolls Royce and two other vehicles on Roy, Inc.'s insurance                 
          policy was to obtain a multiple-car discount on the premiums.               




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