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(6th Cir. 1986), revd. on other grounds sub nom. Bethesda Hosp.
Association v. Bowen, 485 U.S. 399 (1988); Green v. Cashman, 605
F.2d 945, 946 (6th Cir. 1979). In any event, petitioners' policy
arguments do not override the terms of an unambiguous statute.
See In re Transcon Lines, 58 F.3d 1432, 1437-1438 (9th Cir.
1995); In re Kelly, 841 F.2d 908, 913 (9th Cir. 1988).
We find that amounts received by petitioners from ElderPlace
for adult foster home care are not qualified foster care payments
under section 131(b) and are includable in gross income in each
of the years at issue in this case.
Expense Allocation Under Section 265
The parties agree that petitioners incurred and paid certain
expenses related to their operation of an adult foster home for
all the years involved here. The parties also agree that
petitioners received payments for providing adult foster home
care for individuals, some of which are not includable in income.
Pertinent to these facts is section 265, which provides in
part:
SEC. 265(a). General Rule.--No deduction shall be
allowed for--
(1) Expenses.--Any amount otherwise allowable
as a deduction which is allocable to one or more
classes of income other than interest (whether or
not any amount of income of that class or classes
is received or accrued) wholly exempt from the
taxes imposed by this subtitle, or any amount
otherwise allowable under section 212 (relating to
expenses for production of income) which is
allocable to interest (whether or not any amount
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