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occupants of ILUs. Mr. Dalton’s calculations provide a deduction
per residence while the ad hoc committee’s calculations are per
resident. Mr. Powell applied the percentage based on the actual
monthly service fees paid by petitioners and calculated an
allocable amount per residence.37 Although respondent states
that Mr. Powell’s application of the percentage methodology is
correct, respondent argues that a weighted average should be used
because it provides some consistency among ILU residents and is
fair and objective. Petitioners argue that the allocation
percentages should be applied to the actual fees they paid.
We believe that the more appropriate application of the
percentage method is to allocate to each resident the same amount
for purposes of determining the appropriate medical deduction
related to the payment of monthly service fees. If we accepted
petitioners’ approach, single residents and residents of double-
occupancy ILUs that are larger than the average ILU (and thus pay
higher monthly service fees) would get a larger medical expense
deduction based solely on the number of occupants of the ILU or
the square footage of the unit. We fail to see the relationship
between the health care expenses of residents and the size and
37This application of the percentage method appears at odds
with a statement in the section of Mr. Powell’s report providing
an overview and criteria for the evaluation of the different
methods. In his report, Mr. Powell states that similar residents
have the same expected health care usage and thus should receive
the same deduction regardless of the size of their accommodations
or the fees they pay.
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