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activities of daily living". Ore. Rev. Stat. sec. 443.705(6)
(1992) (emphasis supplied).
Although petitioners were separately paid for room and board
for most residents,8 petitioners' exempt and nonexempt foster
care income was based on their home ownership. In order to
qualify as having an adult foster home petitioners must under
Federal and State law provide the appropriate services in their
home, and they in fact did so in the years under consideration.
The expenses for mortgage interest, real estate taxes, insurance,
repairs and maintenance, utilities, depreciation, and "other"
home expenses were incurred as a result of or incident to their
adult foster home activity, and their income was derived from the
use of their home as an adult foster home. There is a direct
factual relationship between those expenses and all petitioners'
adult foster home care income, both taxable and nontaxable.
We find that petitioners' business expenses that they have
characterized as "service" expenses, "room and board" expenses
and other expenses are related to all of petitioners' adult,
foster home care income and must be allocated between exempt
foster home care income and nonexempt foster home care income.
We further find that under the facts and circumstances of this
case, respondent's method of proportional allocation of expenses
8We note that there is no separately stated room and board
amount for petitioners' "private pay" residents.
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