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partnership income, loss, deductions, and credits were determined
based on their ownership percentages in accordance with section
706.1 After concessions, the sole issue for decision is whether
petitioner was divested of his ownership interest in Life Care
Communities of America, Ltd., on January 12, 1989, or June 30,
1990.
FINDINGS OF FACT
In October 1981, petitioner, Hudson D. Fowler, Jr. (Fowler),
and Raymond N. Smith (Smith) formed FMS Properties, Inc., a
Florida corporation (FMS), which developed a life care retirement
center (retirement center). FMS became the sole general partner
of FMS Properties, Ltd., a limited partnership (partnership),
formed in December 1981. In January 1982, the partnership’s name
was changed from FMS Properties, Ltd. to Life Care Communities of
America, Ltd. Other entities created by petitioner, Smith, and
Fowler, included Bentley Village, Inc., a Florida not-for-profit
corporation (Bentley Village), and Life Care Communities
Management Corporation, a Florida business corporation
(management company). In the aggregate, FMS, the partnership,
Bentley Village and the management company, directly and
indirectly, owned and operated the retirement center. Bentley
1 Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect during the years in issue,
and all Rule references are to the Tax Court Rules of Practice
and Procedure.
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