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The memorandum further states that for the years 1997, 1998,
and 1999, the ad hoc committee had coordinated and worked with
AFVW management to review and make recommendations regarding the
portion of monthly service fees allocable to medical care. In
addition, the memorandum states that certified data from the
financial records of AFVW for these years was provided to the ad
hoc committee and that data was used to determine the appropriate
allocation percentage. The allocation percentage is listed as
40.3 percent and 41.6 percent for the years 1997 and 1998,
respectively. The memorandum then states that the portion of the
monthly service fees allocable to medical care is determined per
resident. AFVW residents were advised to consult their tax
adviser for possible application of the information contained in
the memorandum, and it is stated that neither AFVW nor the
resident council is a tax adviser. The memorandum is signed by
the chairman of the resident council and the president/CEO of
AFVW.
III. Petitioners’ Tax Returns
On their jointly filed 1997 and 1998 Forms 1040, U.S.
Individual Income Tax Return, petitioners reported medical and
dental expenses of $12,743 and $16,828, respectively.12 Of these
amounts, $6,557 and $9,891 for the years 1997 and 1998,
12The amounts stated in this paragraph are before
application of the 7.5-percent floor contained in sec. 213(a).
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