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the portion of monthly service fee for ILU residents that was
allocable to medical care was $416 per residence per month.
C. Ad Hoc Committee’s Calculation of Medical Expenses
In 1997, the resident council of Village West established an
ad hoc committee (hereinafter sometimes referred to as the
committee) to recalculate what portion of the monthly service
fees paid by residents living in ILUs should be allocated to
medical care. The ad hoc committee reported to the resident
council. Petitioner was a participant of the ad hoc committee.
In February 1998, Mr. Dalton supplied the resident council with
information for purposes of determining the appropriate medical
deductions for ILU residents for 1997 and 1998.9
In a letter dated March 13, 2000, the ad hoc committee
reported to the resident council its findings regarding income
tax deductions for ILU residents for health care expenses. Using
the percentage method, the committee calculated that the portions
of monthly services fees allocable to medical care were 40.3
percent and 41.6 percent for the years 1997 and 1998,
respectively. In calculating total operating expenses, the
committee subtracted interest expense, depreciation and
amortization, issue cost, and noncontract patient expenses from
total AFVW expenses. In calculating medical expenses, the
9The information supplied included the 1998 financial
document that should have been included in the Health Facility
Information report.
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