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maintenance services for the building, grounds, beachfront, and
pool. A management service company known as the Kennedy Company
managed the rental unit during the years in issue. The company
handled reservations, incoming and departing guests, and
emergency repairs of the rental unit. The company was also
responsible for advertising the availability of the unit,
negotiating leases, collecting lease payments, and providing
cleaning and repair services. Petitioners paid the company 30
percent of rental income during 1994 and 25 percent of rental
income during 1996. During 1996, the average rental period of
the unit was 5.6 days. The unit was rented on the following
dates that year, with petitioners earning the specified amounts
of rental income and incurring the corresponding amounts of
management fees:
Rental Rental Management
Period Income Fees
4/05-4/10 $360 $90.00
5/05-5/08 210 52.50
5/16-5/20 210 52.50
5/24-5/27 195 48.75
5/31-6/02 195 48.75
6/06-6/09 295 73.75
6/10-6/19 735 183.75
6/19-6/20 135 33.75
6/21-6/23 245 61.25
6/29-7/13 1,470 367.50
7/27-8/03 735 183.75
8/03-8/17 1,470 367.50
8/17-8/24 735 183.75
8/24-8/31 535 133.75
8/31-9/03 295 73.75
The management service company paid several expenses on behalf of
petitioners during 1996. The yearly income and expense statement
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Last modified: May 25, 2011