- 42 -
Whether an expense is for medical care is primarily a
question of fact. Levine v. Commissioner, 695 F.2d 57, 59 (2d
Cir. 1982), affg. T.C. Memo. 1981-437; Counts v. Commissioner, 42
T.C. 755, 764 (1964); Estate of Smith v. Commissioner, 79 T.C. at
319; sec. 1.213-1(e)(1)(v), Income Tax Regs. For purposes of
this case, the factual issues involved are: (1) The portions of
the monthly service fees allocable to medical care under the
percentage method; and (2) the amounts, if any, that petitioners
are entitled to deduct for Mr. Baker’s use of the pool, spa, and
exercise facilities.
On brief, respondent argues that petitioners have failed to
present credible evidence that they are entitled to the amounts
of the medical deductions claimed on their returns for the years
in issue and that they did not comply with the substantiation,
recordkeeping, and cooperation requirements of section
7491(a)(2). However, at trial, respondent specifically stated
that petitioners had cooperated and maintained records.
Respondent represented to the Court that the only issue under
section 7491(a) was whether petitioners had presented credible
evidence. We treat respondent’s representation at trial as a
26(...continued)
1998. Internal Revenue Service Restructuring and Reform Act of
1998, Pub. L. 105-206, sec. 3001(c), 112 Stat. 727. Respondent
has conceded that the examination in this case commenced after
July 22, 1998.
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