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their personal tax return. After concessions,1 the sole issue
for decision is whether the entire amount that petitioner Mary H.
Muegge received was taxable income for services she performed for
Robert J. Stern, as respondent contends; or whether one-half of
that amount was a nontaxable reimbursement Robert J. Stern
promised to petitioners, as petitioners contend. We hold that it
is a nontaxable reimbursement.
Section references are to the Internal Revenue Code in
effect for the taxable year in issue, unless otherwise indicated.
Rule references are to the Tax Court Rules of Practice and
Procedure. References to petitioner are to Mary H. Muegge.
FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
Petitioners lived in Carmel, Indiana, when they filed the
petition.
A. Petitioners’ Support of Mr. Stern
1. Mr. Stern’s Sister
Before 1984, petitioner was employed as a surgical
technician in Columbus, Ohio. In the course of her employment,
petitioner met and became close friends with a patient, Ruth
Stern (Ms. Stern), who had cancer. Ms. Stern told petitioner of
her concern for her brother, Robert J. Stern (Mr. Stern). While
1 In the answer, respondent contended that the amounts
petitioner Mary H. Muegge received for services that she provided
Mr. Stern were subject to self-employment tax under sec. 1401.
Petitioners concede this issue on brief.
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