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sale" of his or her medical practice to SMF, in a July 11, 1995,
letter. Dr. Levin calculated that the aggregate value of the
intangible assets that had been "contributed" by the SWMG
physicians to SMF was equal to the "business enterprise
valuation" of SWMG as determined by Houlihan ($4 million), less
the aggregate value of the amount paid by SMF to the SWMG
physicians for the fixed assets of their practices, as determined
by Narvco ($1,156,733), less the aggregate accounts receivable
estimated to be collectible by the SWMG physicians as of November
1, 1994 (the transfer date) ($1,210,890). The residual
($1,632,377) was assumed to represent "the value of the
intangible donation to * * * [SMF]." This aggregate value was
then allocated among the 29 SWMG physicians who sold their
medical practices to SMF, pursuant to a formula devised by Dr.
Levin. That formula allocated (i) 50 percent of the aggregate
value on the basis of each physician's share of gross revenues
generated in the year preceding the transfer to SMF; (ii) 25
percent on the basis of each physician's "years in the
community", with up to a maximum of 5 years being counted; and
(iii) 25 percent on the basis of each physician's share of the
aggregate fixed assets transferred to SMF by the SWMG physicians.
V. Petitioners' and SMF's 1994 Returns
On their 1994 returns, petitioners claimed charitable
contribution deductions for the transfer to SMF of the intangible
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