Pavel Dobra and Ana Dobra - Page 1


                                   111 T.C. No. 19                                    

                               UNITED STATES TAX COURT                                

                     PAVEL DOBRA AND ANA DOBRA, Petitioners v.                        
                    COMMISSIONER OF INTERNAL REVENUE, Respondent                      

               Docket No. 7573-97.              Filed December 29, 1998.              

                    H and W owned four residential properties located                 
               in State O.  One of the properties was H and W's family                
               residence.  The other three were not.  H and W used the                
               properties to provide residential care for adults.                     
               State O paid H and W for this care.  H and W did not                   
               report any of the payments received from State O in                    
               1992 and 1993, on the theory that the payments were                    
               "qualified foster care payments", excluded from gross                  
               income under sec. 131(a), I.R.C.  None of the                          
               unreported payments were "difficulty of care payments",                
               as defined by sec. 131(c), I.R.C.                                      
                    Held:  To be excluded from gross income under sec.                
               131(a), I.R.C., the payments must be paid for care                     
               provided in "the foster care provider's home" (sec.                    
               131(b)(1)(B), I.R.C.).  A house or other dwelling is                   
               "the foster care provider's home", only if the foster                  
               care provider resides there.  There is no evidence in                  
               the record that H and W resided in any of the three                    

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