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not deposited into the business account. Nor did they keep any
detailed records as to the amount of their personal funds which
they used in Nanny’s business or as to the amount of Nanny’s
funds which they used personally. For both Federal income tax
and financial accounting purposes, Mr. Mason calculated at the
end of each year the balance of any loan that he considered to
exist between Nanny’s and petitioners on account of Nanny’s use
of petitioners’ funds and vice versa.
Petitioners also owned a mobile home park called Lake
Michigan Heights Mobile Home Park (Lake Michigan Heights) and a
building with office and retail space called Bridge Street Centre
(Bridge Street). All payments to Lake Michigan Heights and
Bridge Street were made by check, and petitioners deposited all
of these checks into the separate bank accounts of Lake Michigan
Heights and Bridge Street. Petitioners operated Lake Michigan
Heights and Bridge Street as unincorporated businesses. For the
respective years from 1987 through 1989, petitioners reported on
their income tax returns, as initially filed, that they had
received rent of $27,893, $28,375, and $37,871 as to Lake
Michigan Heights and $81,305, $87,503, and $94,394 as to Bridge
Street.
Nanny's Old Place is petitioners’ unincorporated business
that rents to Nanny’s the real estate petitioners owned in
Charlevoix. Petitioners received rent checks from Nanny’s
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Last modified: May 25, 2011