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Sutter had no market value beyond the value of their professional
medical services". The Dutcher appraisal contains no further
discussion or analysis purporting to support this proposition.
The Dutcher appraisal does, however, contain a "Physician
Compensation Survey", which sets forth the national median ratios
(for the "Western Region") of physician compensation to net
revenues for listed medical specialties. Using a weighted
average of those published ratios, the Dutcher appraisal's
Physician Compensation Survey shows that the weighted average of
the national median ratios of "compensation to revenue" for the
specialties mix of the SWMG physicians was 45.18 percent. As
previously noted, the PSA entered into between SWMG and SMF
provided for compensation to SWMG equal to 57.75 percent of fee-
for-service revenue, 47 to 53 percent of capitation revenue, and
at least 55 percent of risk pool revenue.
VII. Issues Related to Specific Petitioners
A. The Kennedys
On Schedule C of the Kennedys' 1994 return, they reported
$195,709 of gross receipts from Dr. Kennedy's medical practice.
The notice of deficiency issued to the Kennedys increased
reported Schedule C gross receipts by $3,760 to $199,469.
B. The Derbys
On Schedule E, Supplemental Income and Loss, Part II, Income
or Loss From Partnerships and S Corporations, of the Derbys' 1994
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