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Taxable Year Ended1 Deficiency
Sept. 30, 1984 $159,008
Sept. 30, 1985 110,623
Sept. 30, 1986 75,490
Sept. 30, 1987 45,444
Sept. 30, 1988 62,041
Unless otherwise stated, all section references are to the
Internal Revenue Code, as in effect for the years in issue, and
all Rule references are to the Tax Court Rules of Practice and
Procedure.
The primary issue for decision is whether petitioner's tax-
exempt status should be revoked. This issue turns on the
question whether petitioner's sale of its hospital in May 1983
was for less than fair market value, resulting in prohibited
inurement within the meaning of section 501(c)(3). If we decide
that there was no such inurement, we must decide whether
petitioner's tax-exempt status should be revoked for failure to
conduct exempt activities for its fiscal years ended
September 30, 1985, and 1986.
If we decide petitioner's tax-exempt status was properly
revoked, then we must decide whether petitioner is entitled to
deduct certain amounts as ordinary and necessary business
expenses during the years for which its income is no longer tax-
exempt.
1 The issuance of a notice of deficiency for the taxable
year ended Sept. 30, 1983, is barred by the period of
limitations.
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