Steven D. Rapp and Judith A. Rapp - Page 3




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               Bluefin Bay consists of six buildings, each having a                   
          different layout.  The six buildings contain a total of 54                  
          condominium units.  Petitioners' unit is a three-bedroom unit.              
               As unit owners, petitioners were members of the Bluefin Bay            
          Condominium Association (BBCA), the common interest owner of                
          Bluefin Bay.  Petitioner husband was one of BBCA's officers, at             
          one time serving as its president.  BBCA owns all of Bluefin                
          Bay's common property, including an indoor swimming pool, tennis            
          courts, a conference room, a parking area, water and waste                  
          treatment facilities, and communication and cable equipment.                
          BBCA arranged for the Tofte Management Company (TMC) to manage              
          and operate the Bluefin Bay complex.  BBCA's members, the unit              
          owners, entered into individual management contracts with TMC.              
          The terms of the management contracts were the result of the                
          joint effort of numerous BBCA members, including petitioner                 
          husband.                                                                    
               Petitioners' management contract with TMC was effective                
          January 1, 1991, through the taxable years in issue.  Under the             
          management contract, TMC was appointed as the exclusive rental              
          agent for petitioners' unit.  Petitioners were required to                  
          specifically reserve their unit in writing for the days which               
          they intended to personally use it.  In the event petitioners               
          failed to properly notify TMC of their intended use, rental                 
          arrangements previously made by TMC with other guests would hold            






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Last modified: May 25, 2011