Erickson Post Acquisition, Inc. - Page 2

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          under section 61(a), as respondent contends, or a loan excluded             
          from income, as petitioner contends.1                                       
                                  FINDINGS OF FACT                                    
               Some of the facts have been stipulated and are so found.               
          The stipulation of facts and the attached exhibits are                      
          incorporated herein by this reference.                                      
               When the petition in this case was filed, petitioner                   
          maintained its principal office in Stillwater, Minnesota.                   
          Petitioner was incorporated under the laws of the State of                  
          Minnesota on July 13, 1994.  During the years at issue, and at              
          all times subsequent thereto, Richard Zimmerman (Mr. Zimmerman)             
          and his wife, Janet Zimmerman (Mrs. Zimmerman), each owned 50               
          percent of petitioner’s issued and outstanding common stock.  Mr.           
          Zimmerman served as president and Mrs. Zimmerman as vice                    
          president.  Mr. Zimmerman is primarily responsible for management           
          of the day-to-day operations of petitioner’s business activities.           
          Since the date of incorporation, petitioner’s principal business            
          has been the ownership and operation of two gasoline                        
          stations/convenience stores in Stillwater, Minnesota--one at                
          14738 North 60th Street (the 60th Street property) and the other            
          at 2500 West Orleans Street (the Orleans Street property).                  




               1Section references are to the Internal Revenue Code in                
          effect for the years at issue.                                              




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