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MHI. MHI maintains the Veazie property as residential rental
property for assisted public housing.7 The local Housing
Authority pays MHI a monthly rent of $800 (housing payment). The
tenant also reimburses MHI directly for utility expenses at $300
per month (plus any excess amount).
3. Petitioner’s Veazie Property-IRA Arrangement
At trial, petitioner described his Veazie property-IRA
arrangement8 as follows:
PETITIONER: * * * [The housing payment] was all
designated as income from the Section 8 housing. * * *
[The housing payment] was designated as an IRA in my
account.
THE COURT: * * * How were you benefitting from
this then?
PETITIONER: I wasn’t.
* * * * * * *
THE COURT: Well, isn’t an eight percent return
better than no return at all? It sounds like you made
a gift to your daughter or this corporation?
PETITIONER: No, no, no. It’s designated as a
corporation that that money is mine eventually. * * *
THE COURT: But you’re telling us that this
arrangement was designed for your ultimate income
security?
7 The same Section 8 tenant has occupied the Veazie
property since MHI purchased it in 1998.
8 The phrase “Veazie property-IRA arrangement” and its
derivatives are intended only for narrative convenience to
describe the form of the disputed transaction and does not
connote the existence of an IRA for Federal income tax purposes.
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