Kai H. and Susanna Lee - Page 1

                                                                                     









                                 T.C. Memo. 2006-193                                  


                               UNITED STATES TAX COURT                                


                       KAI H. and SUSANNA LEE, Petitioners v.                         
                    COMMISSIONER OF INTERNAL REVENUE, Respondent                      
                       ULYSSES K. and JANE LEE, Petitioners v.                        
                    COMMISSIONER OF INTERNAL REVENUE, Respondent                      


               Docket Nos. 16601-04, 16602-04.   Filed September 11, 2006.            


               Roger Adams, for petitioners.                                          
               John D. Faucher, for respondent.                                       


                       MEMORANDUM FINDINGS OF FACT AND OPINION                        

               HOLMES, Judge:  In 1999 and 2000, Ulysses Lee was a full-              
          time employee of the IRS; his brother, Kai, worked as a doctor              
          and professor and ran several other businesses.  One of these               
          businesses was Lee Brothers Investments, a real estate investment           





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