Eric B. Benson, et al. - Page 20

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          Rents:                                                                      
          3341 Lucile                   --                  12,900                    
          3 Arroyo                 --                       8,550                     
          189 Ivy                        --                      3,500                
          Total gross rents        24,950                   24,950                    
          Royalties:                                                                  
          Occidental               --                       785                       
          Permain                  --                       124                       
          Texaco                   --                       355                       
          Phillips                 --                       59                        
          Exxon               --                            5                         
          Walter L. Johnson        --                            63                   
          NPI                           --                      165,481               
          Total royalties          166,872                  166,872                   
          Other income (NPI)       100,000                  100,000                   
          Evelyn C. Hermsmeir      137,341                  137,342                   
          partnership                                                                 
          1120-S return of NPI:                                                       
          ERG Hercules payment     483,098                  --                        
          Gross rents                   119,508                  79,712               
          Total                    602,606                       79,712               
          Baden Spiel Haus         --                            625                  
          partnership                                                                 
               Total               1,137,646                615,378                   
          The parties calculated the percentage of omitted gross income in            
          1989 as follows:                                                            
          The Bensons’            Respondent’s                                        
          calculation             calculation                                         
          Omitted gross income     $116,679            $444,947                       
          Reported gross income      $1,137,646        $615,377                       
          Percent understated      10.26                         72                   

                    1.   Omitted Gross Income                                         
               The parties agree that the Bensons omitted gross income of             
          $116,679, which consists of:  (1) Constructive dividends of                 
          $96,749 from ERG’s payment of legal expenses (Check ref:                    
          Carroll); (2) constructive dividends of $10,624 from automobile             
          expenses paid by ERG; (3) constructive dividends of $2,404 from             





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