Red Tab 203 — Financial Baselines (Schedule C 2017–2019) — Combined Operations & Displacement Pathway (Evidence‑Only)¶

GUARDRAIL: RED — FREEMAN STREET DAMAGES

Freeman Street opportunity-loss damages only. No G21 base damages, no enterprise multipliers.

0) Purpose & Scope (Red discipline)¶

This Part‑C technical foundation page consolidates filed IRS Schedule C gross‑receipts baselines (2017–2019) for combined operations:

97 Green Street (G21) — Multi‑Media Production (sole proprietorship; Schedule C)
66 Freeman Street (Karuna LLC) — Multi-Media Production (operating entity; Schedule C)

It also documents the displacement pathway (G21 flood → compromised alternate housing → 66 Freeman studio displaced into residential service) with links to the underlying Blue Tab 103 evidence.

Evidence‑only. No multipliers or scenario math here. All Red math remains in Red Tab 002 (per the Red control index).

Baseline Summary (locked-precision; full detail in §1)¶

Source	3-Year Sum	3-Year Annual Avg	Locked Monthly (sum÷36)	Form-Face Line A
97 Green (G21) sole-prop	$186,394	$62,131.33	$5,177.6111	Multi-Media Production
66 Freeman (Karuna LLC)	$370,115	$123,371.67	$10,280.9722	Multi-Media Production
Combined Operations	$556,509	$185,503.00	$15,458.5833	(parallel descriptor)

Status: Tax-verified IRS Schedule C baselines; e-filed and IRS-accepted; preparer Janice Hayman, CPA (PTIN P01058125); §§6694/6695 preparer-attestation regime. Evidence-only. All scenario math → Red Tab 002 (Red guardrail).

1) Tax‑Verified Operating Baselines (2017–2019)¶

Source: IRS‑filed Schedule C (Form 1040) returns, e‑filed and IRS‑accepted across tax years 2017, 2018, and 2019. Preparer: Janice Hayman, CPA (PTIN P01058125), transmitting under the §§6694/6695 preparer‑penalty regime via PTIN‑credentialed e‑file. Native return PDFs on file; Hayman's 2020 EIDL 4506‑T filings available as IRS‑side authentication backstop if requested.

A) 97 Green Street (G21) — Multi‑Media Production (sole proprietorship; Schedule C)¶

Annual Gross Receipts:

2017: $61,199
2018: $60,735
2019: $64,460 (10 months pre‑flood; flood 2019‑10‑13)

3‑Year Aggregate:

Three-year sum: $186,394
Three-year annual average: $62,131.33
Monthly baseline (locked-precision; sum÷36): $5,177.6111

IRS Form‑Face Line A descriptor: "Multi‑Media Production" (97 Green Street).

Cross‑link: Blue Tab 102 §1.1 carries the identical G21 monthly baseline ($5,177.6111) as the documentary anchor for the G21 base‑damages claim, derived under the locked G21 cascade canon. Red Tab 203 §1.A and Blue Tab 102 §1.1 are mutually consistent. The G21 dual‑use IRS Form 8829 evidence (45% allocation across 2017‑2019) is documented in Blue Tab 102 §1.2 and is referenced here only to establish the G21‑side documentary tier; it is not invoked in Red lanes.

B) 66 Freeman Street (Karuna LLC) — Multi-Media Production (Schedule C)¶

Annual Gross Receipts:

2017: $121,815
2018: $123,100
2019: $125,200

3‑Year Aggregate:

Three-year sum: $370,115
Three-year annual average: $123,371.67
Monthly baseline (locked-precision; sum÷36): $10,280.9722

IRS Form‑Face Line A descriptor: "Multi‑Media Production" (66 Freeman Street).

Entity / tenancy note: Karuna LLC is the operating entity on the Schedule C for the 2017‑2019 baseline window. The 66 Freeman Street studio facility itself has been under continuous lease since March 2010; the lease was held by Green Street Group LLC (sister entity) through the 2017‑2019 baseline window and was assigned to Karuna LLC as named tenant on the July 2021 renewal. The change in named lessee does not interrupt operational tenure.

C) Combined Operations (G21 + Karuna LLC)¶

Combined 3‑Year Aggregate:

Combined three-year sum: $556,509 ($186,394 + $370,115)
Combined three-year annual average: $185,503.00
Combined monthly baseline (locked-precision; sum÷36): $15,458.5833

Use in Red: Counsel may (i) cite these baselines as capacity support for Red lanes 101–104, and/or (ii) use monthly baselines in Red Tab 002 when modeling pre‑/post‑loss deltas alongside acceptance and policy multipliers fixed in Red Tab 001. Red 203 itself computes no scenario dollars.

D) Methodology Note — Locked-Precision Monthly Derivation¶

All monthly baselines documented above are derived using the sum-of-three-years ÷ 36 months methodology (locked‑precision derivation), which preserves arithmetic precision through aggregation without introducing rounding error at the intermediate annual‑average step. The equivalent statement of this rule is: do not round the monthly baseline; round only at final category totals.

This methodology supersedes any pre‑lock derivations that used rounded‑annual‑average ÷ 12 months (which introduces a small but non‑zero rounding error of approximately ±$0.03/month at each location). The locked methodology is documented in Blue Tab 002 §3 and Blue Tab 102 §3 (rounding policy) and applies uniformly across all Schedule C monthly baselines in this binder.

Worked examples (locked-precision):

Source	Calculation	Locked Monthly
G21 (97 Green)	$186,394 ÷ 36	$5,177.6111
Karuna LLC (66 Freeman)	$370,115 ÷ 36	$10,280.9722
Combined Operations	$556,509 ÷ 36	$15,458.5833

E) Documentary Corroboration — Line A Descriptor Parallel¶

The IRS Schedule C Line A (Principal Business) descriptor is identical on the 66 Freeman Karuna LLC return and the 97 Green sole‑proprietorship return across all three tax years (2017, 2018, 2019): "Multi‑Media Production".

Both filings were prepared by the same credentialed preparer (Janice Hayman, CPA; PTIN P01058125) on a pre‑flood engagement and transmitted under the §§6694/6695 preparer‑attestation regime. The identical Line A descriptor reflects an IRS-filed position that the same line of professional work was conducted at two locations — 66 Freeman as the operating facility, 97 Green as the residence/studio — during the three baseline years immediately preceding the October 13, 2019 flood.

This Line A parallel constitutes continuation-supporting documentary corroboration at the IRS-filed-position tier: the operating venture's Schedule C revenue at 66 Freeman and the sole-proprietorship's Schedule C revenue at 97 Green are characterized by the IRS-filed returns as the same principal business activity across the entirety of the baseline period.

Scope exclusion — 40 Frost Street. The 40 Frost Street Sound City sole‑proprietorship Schedule C (Line A descriptor: "Sound Production"; tax years 2017–2019) covers a separate Williamsburg music rehearsal and production sub‑rental operation that was flood‑unaffected and is not part of the Red lane evidentiary scope. The 40 Frost return is carried in broader §5 Part A operating‑capacity context in counsel correspondence (Marcucci Apr 30 response package) but is excluded from Red Tab 203 baselines on the same color‑discipline grounds that exclude it from Blue Tab 102.

F) Gross-to-Net Income Analysis (on file)¶

A gross-to-net income analysis (tax years 2017–2019) is on file. It restates the three Schedule C operations — 97 Green (Loft/Studio), 40 Frost (Sound City), and 66 Freeman (Karuna LLC) — showing, per year, gross revenue, depreciation add-backs, office-in-home add-backs (97 Green only), and resulting net business income.

The analysis's gross-revenue figures for 97 Green and 66 Freeman reconcile exactly to the §1.A and §1.B baselines across all three years (97 Green three-year sum $186,394; 66 Freeman three-year sum $370,115); its annual total and net/add-back rows are internally consistent.

Scope discipline. The analysis also carries the 40 Frost (Sound City) operation, which remains outside Red lane scope per §1.E and is referenced here for source completeness only. The net-income and add-back figures are documentary; Red lanes use the §1 gross monthly baselines, and any scenario use routes to Red Tab 002. Source file in §6 Evidence Index.

2) Displacement & Alternate‑Housing Context (evidence routing)¶

Event: G21 flood (2019‑10‑13) renders G21 residence/studio uninhabitable.
Alternate housing: Kofman Unit F1 offer rejected on habitability grounds (prior tenant Christopher Kauch documented chronic leak/mold history; subsequent occupants Jason Fesel and Nicholas Lemons added health‑impact and concealed‑mold records to the same unit); see Blue Tab 103 — Alternative Housing Costs for primary evidence.
Operational pivot (Rule #21 displacement framing): With G21 uninhabitable, F1 unacceptable on habitability, and no resources available to secure separate alternative housing, the 66 Freeman studio was forced into residential service by necessity, displacing its operating function as a production and broadcast studio. The studio function did not continue; it was displaced. The COVID‑19 pandemic followed shortly after, compounding the disruption.

Framing discipline. This displacement framing aligns with the Karuna Freeman Studios lost‑revenue damages claim carried through Red Tab 001 / Red Tab 002 and is internally consistent with §6 of the Marcucci April 30 response. Any language implying the 66 Freeman studio "continued to operate" through the displacement period is factually inconsistent with the lost‑revenue claim and is not used in this binder.

Color discipline. The costs of alternate housing remain in Blue 103; the business‑operations consequence (combined‑ops baseline + displacement) is contextualized here in Red 203 and carried through Red lanes.

3) Blue‑Compliant vs Red‑Compliant Timelines (why split views)¶

Blue timelines must exclude Freeman/strategy/insurance content (kept in Blue 102).
Red timelines can include the full displacement path (below), because Red houses opportunity‑loss and integrated‑ops evidence. (The Red control affirms category pages are evidence‑only; math sits in Tabs 001/002.)

4) Evidence Timeline — Combined Operations & Displacement (Red‑Compliant)¶

gantt
    title Red 203 — Combined Ops Baseline & Displacement Pathway (Evidence Timeline)
    dateFormat  YYYY-MM-DD

    section Pre-Flood Operations
    Normal Operations (G21)                    :op1, 2017-01-01, 1017d
    Karuna LLC Operations (Freeman)            :op2, 2017-01-01, 1017d
    Tax Baselines Documented (Schedule C)      :tax, 2017-01-01, 1095d

    section Event & Displacement
    G21 Flood (Oct 13, 2019)                   :flood, 2019-10-13, 1d
    G21 Uninhabitable                           :habit, 2019-10-14, 120d
    F1 Alternative Housing Offer Rejected       :alt1, 2019-11-01, 90d
    66 Freeman Studio Function Displaced        :pivot, 2020-01-15, 540d

    section Documentation
    Bank/Invoice Evidence Collection            :docs, 2019-11-01, 240d
    Client/Engagement Communications Archive    :comm, 2019-11-01, 180d

Purpose: Visually locates the tax baselines alongside the displacement path that forced 66 Freeman from studio operation into residential service when G21 was uninhabitable and F1 alternative housing was unacceptable on habitability — without importing Blue dollars into Red.

5) Routing & Guardrails¶

Math governance (Red): All scenario math & multipliers → Red Tab 002; category weights fixed in Red Tab 001.
No double counting: Blue (G21 base damages) remains separate; this page does not restate Blue totals.
Cascade canon discipline: All monthly baselines on this page use the locked‑precision sum÷36 methodology (§1.D). G21 baseline is mutually consistent with Blue Tab 102 §1.1 (G21 cascade canon).
Cross‑refs:
- Blue Tab 102 (G21 business income) → points here for combined‑ops baselines; G21 monthly figure ($5,177.6111) is identical across both tabs.
- Blue Tab 103 (Alternative Housing Costs) → evidences F1‑displacement; cited here, not copied.

6) Evidence Index (on file)¶

Gross-to-Net Income Analysis (2017–2019): Derived breakdown of the filed Schedule C operations (97 Green Loft/Studio, 40 Frost Sound City, 66 Freeman Karuna LLC) — gross revenue, depreciation add-backs, office-in-home add-backs, and net business income by year; gross figures for 97 Green and 66 Freeman reconcile to §1 (see §1.F). MD5 a4441d13b642ecb09d0ba7fe62c35182. Source: Gross-to-Net Income Analysis 2017-2019.
IRS-filed Schedule C returns (2017, 2018, 2019): 66 Freeman Karuna LLC + 97 Green sole‑proprietorship; e‑filed and IRS‑accepted; native return PDFs on file.
IRS Form 8829 (Business Use of Home), 97 Green sole‑proprietorship 2017–2019: documents G21 dual‑use declaration (45% allocation, three‑year consistent); paired with G21 Schedule C; see Blue Tab 102 §1.2 for the G21‑side detail (referenced for documentary‑tier completeness; not invoked in Red lanes).
Preparer attestation: Janice Hayman, CPA; PTIN P01058125; §§6694/6695 preparer‑penalty regime via PTIN‑credentialed e‑file transmission.
IRS‑side authentication backstop: Hayman 4506‑T filings on record from the 2020 EIDL application available if requested by counsel.
Lease history corroboration: 66 Freeman Street studio facility under continuous lease since March 2010 (Green Street Group LLC through 2017–2019 baseline window; assigned to Karuna LLC at July 2021 renewal); documented in counsel correspondence attachment package.
Alternate housing evidence: Blue Tab 103 — F1 offer materials, habitability‑rejection documentation, F1 witness chain (Kauch, Fesel, Lemons), receipts.
Bank/AR/engagement records: communications archive (indexed in Red 201/202 where applicable).

END — Red Tab 203 — Financial Baselines (Schedule C 2017–2019) — Combined Operations & Displacement Pathway (Evidence‑Only) v1.3