Residential Management Services Trust - Page 4




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          reduced on account of any increase in their adjusted gross                  
          income;2 and whether the Careys are subject to an accuracy-                 
          related penalty under section 6662.                                         
                                  FINDINGS OF FACT                                    
               Some facts have been stipulated and are so found.  The                 
          stipulation of facts filed by the parties, along with                       
          accompanying exhibits, is incorporated herein by this reference.            
          Residence; Principal Place of Business                                      
               On the date the trust filed its petition in this case, its             
          principal place of business was in Redding, California.  On the             
          date the Careys filed their petition in this case, their                    
          residence was in Bella Vista, California.                                   
          Michael Carey                                                               
               Michael is a licensed occupational therapist.  During 1995,            
          Michael was the proprietor of two residential care facilities for           
          developmentally disabled adults.  Those two facilities were                 
          called Sunshine Residential Program (Sunshine) and Rancho                   
          Residential Program (Rancho).  In addition, during at least the             
          first 11 months of 1995, Michael was obligated by contract to               
          provide his services as a licensed occupational therapist to the            
          trust.  That contract required Michael to provide various                   
          services to the trust as needed, at $35 an hour.  By check dated            


               2  This also is a computational matter, and, for the same              
          reasons set forth supra note 1, we shall not further discuss it.            





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