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the amount of grants provided from petitioner's funds
during 1999, $27,236, is compared to the loss, it appears
that petitioner's funds amount to only 5.44% of the loss, a
level that does not assure "attentiveness".
In addition, we disagree with petitioner's argument
that the grant program, as funded by petitioner, is
substantial because 22 percent of the 139 daycare
participants received Cuddeback funds during 1999.
Petitioner computed this percentage by dividing the number
of grant recipients for 1999, 31, by the number of daycare
participants for the year, 139. This percentage does not
show the relative importance of such grants to the daycare
program. It fails to take into account the number of days
each "grant" recipient participated in the daycare program
and it treats all "grant" recipients equally, whether
they receive a 25-, 40-, 50-, or 60-percent "grant".
Finally, we reject petitioner's contention that the
factors contained in section 1.509(a)-4(i)(3)(iii)(d),
Income Tax Regs., weigh heavily in its favor. First,
as explained above, due to the sketchiness of the
information regarding other sources of funds for Keswick's
grant program, we cannot conclude that the percentage of
support from petitioner is sufficient to ensure Keswick's
attentiveness to avoid interruption of the grant program.
Second, we disagree with petitioner's suggestion that
Keswick's letters demonstrate its attentiveness to
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