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Roy, Inc. purportedly acquired the Rolls Royce4 as a
promotional tool to obtain referral business from cardiologists and
hospitals. However, because of the downturn in the economy during
the early 1990's, it was determined that it would be inappropriate
to "showcase the Rolls Royce" while seeking referrals from doctors
who had declining income. Consequently, the Roys decided that Roy,
Inc. should dispose of the Rolls Royce, although the corporate
petitioner did not do so during the years in issue.
The Rolls Royce was driven sparingly by Mohan Roy during the
years in issue. The odometer readings on the Rolls Royce on
various dates were as follows:
Date Odometer Reading
July 21, 1990 150
Oct. 1, 1991 2,023
July 13, 1993 4,581
July 22, 1994 5,152
Nov. 17, 1994 5,226
Occasionally Mohan Roy used the Rolls Royce for commuting to work
from home, attending hospitals to visit patients or perform
surgeries, or having the car serviced (twice per year) or generally
maintained. When not in use, the Rolls Royce was garaged at the
Roys' residence.
Mohan Roy generally drove the Lexus 400 to commute to work and
to perform medical services. The tax returns for the individual
4 The Rolls Royce was purchased for $159,837.19, which
was paid in part by trading in a 1979 Rolls Royce and receiving a
$38,000 credit.
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Last modified: May 25, 2011