Life Care Communities of America, Ltd., A Florida Limited Partnership, Robert W. McMichael, A Partner Other Than The Tax Matters Partner - Page 2

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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,              
                                  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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