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to medical care for petitioners for the years 1997 and 1998,
respectively. In his report, Mr. Powell calculated the amounts
allocable to medical care for petitioners using the actuarial
method, an alternative actuarial method,17 and the percentage
method. Mr. Powell relied on the financial information contained
in the Health Facility Information report for purposes of
applying the above three methods.
Respondent’s current position is that the actuarial method
is the correct way to calculate the deductible portion of
petitioners’ monthly service fees. In the event that the
percentage method must be used, respondent generally argues that
the percentage method calculations performed by Mr. Powell are
the correct calculations to use.18
OPINION
During the years in issue, petitioners lived in an ILU,
which, as stated above, is a residential unit designed for
normal, everyday independent living of AFVW residents, and
resembles a regular residential accommodation that can be found
in any nonretirement living community. The primary issue in this
case is the amount of the monthly service fees paid while
17On brief, respondent expressly states that use of the
alternative actuarial method is not being advocated in this case.
18Respondent does not argue that we should use any of the
figures used by Mr. Dalton in his calculations under the
percentage method, which figures were the basis of the
determination in the notice of deficiency.
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