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Unless otherwise indicated, all section references are to
sections of the Internal Revenue Code in effect for the year in
issue, and all Rule references are to the Tax Court Rules of
Practice and Procedure.
FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
The stipulations of the parties, with accompanying exhibits, are
incorporated herein by this reference.
John T. Jorgl and Sharon Illi (petitioners) are married and
resided in Orange Park, Florida, at the time of filing their
petition in this case.
The Business--Little Rascals Child Care Centers, Inc.
Mr. Jorgl (petitioner) collaborated with Ms. Melanie Biggs
to found a licensed day care center and school in Sunnyvale,
California. An architect by profession, petitioner designed the
facility. The business was incorporated under the laws of
California in June of 1980 as Little Rascals Child Care Centers,
Inc. (Little Rascals), and opened the following September.
Petitioner and Ms. Biggs also founded a second child care center
in Milpitas, California, which was sold in 1986 or 1987.
In 1985, petitioner purchased the stock owned by Ms. Biggs
in Little Rascals and became the sole shareholder. He maintained
an office on the center’s premises, managed the business
operations of the enterprise, served as president, and was a
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Last modified: May 25, 2011