- 27 -
respectively, related to the portion of the monthly services fees
paid allocable to medical care. These amounts are primarily
derived from the ad hoc committee’s calculations. The amounts of
$3,461 and $3,596 for the years 1997 and 1998, respectively,
related to Mr. Baker’s use of the pool, spa, and exercise
facilities at Village West. The remainder of the reported
amounts was for various other items.
Petitioners’ claimed entitlement to deductions for Mr.
Baker’s use of the pool, spa, and exercise facilities is based in
part on a letter dated July 29, 1991, from Elaine K. Jones, M.D.,
which states that her evaluation confirms Mr. Baker’s previous
diagnoses of hypertension, valvular heart disease,
hyperlipidemia, and degenerative arthritis. The letter states
that to treat the above medical conditions it is imperative that
Mr. Baker continue his exercise program, including the exercise
room, swimming pool, and whirlpool at least three times a week.
The letter also states that the exercise program will help
alleviate the symptoms of Mr. Baker’s chronic illnesses.
IV. Respondent’s Determination
The examination in this case commenced after July 22, 1998.
On September 28, 2001, respondent issued a notice of deficiency
to petitioners for their 1997 and 1998 taxable years. In the
notice, respondent determined that the portion of the monthly
service fees attributable to medical care was limited to $4,488
Page: Previous 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 NextLast modified: May 25, 2011