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Reeves’s property by a rundown gangway. The houseboat, the dock,
and the gangway were in a poor and dangerous condition.
In petitioner’s FYE June 30, 1995, Mr. Reeves and petitioner
entered into a lease agreement for $1,000 a month to provide
petitioner with access from Mr. Reeves’s residence to the
houseboat and the dock, the use of his utilities, and the use of
his parking lot, boat, and jet skis for advertising and
promotional purposes.9 In the fiscal years at issue, petitioner
also rented the first floor of Mr. Reeves’s residence for $700 a
month to store goods.
In 1995, Mr. Reeves and petitioner removed the dilapidated
houseboat and the dock and hired a contractor to build a new
houseboat, a 100-foot dock, and a floating garage (floating
structures). Construction of the floating structures was
completed in the spring of 1996, and they were placed into
service on May 28, 1996.10 The Oregon State Marine Board listed
petitioner as the owner and Mr. Reeves as the coowner.11
9 The $1,000 a month also allowed access to Mr. Reeves’s
tennis court and an enclosed area where corporate guests could
place their children so they would be safe from falling into the
Willamette River.
10 Petitioner’s Form 4562, Depreciation and Amortization,
reported the property was placed into service on May 28, 1996.
11 Mr. Reeves claimed that only petitioner owned the
floating structures and he was listed as a coowner because the
State required an individual contact.
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Last modified: November 10, 2007