Jerome J. and Beatrice A. Mack - Page 3

                                        -  -3                                           
          1988, and 1989 with the Internal Revenue Service Center in Ogden,           
          Utah.                                                                       
               Petitioner is an attorney.  For a number of years prior to             
          1986 and through December 1985, petitioner was engaged in the               
          general practice of law in several different partnerships with              
          various other attorneys.                                                    
               Mr. John Moosbrugger (Mr. Moosbrugger) is an attorney who              
          has practiced law for approximately 30 years in Grand Forks,                
          North Dakota.                                                               
               Petitioner and Mr. Moosbrugger practiced law together in a             
          law partnership (the law partnership) from 1966 to 1972.  In                
          1972, the law partnership was converted to a corporation.  The              
          law practice of petitioner, Mr. Moosbrugger, and sometimes others           
          remained in corporate form for several years, but was converted             
          back to a partnership.  Over the years, other attorneys joined in           
          the practice of law with petitioner and Mr. Moosbrugger.  The               
          attorneys included Mr. Don Leonard (Mr. Leonard), Mr. William               
          Murray (Mr. Murray), Mr. Richard Ohlsen (Mr. Ohlsen), Ms. Shirley           
          Dvorak (Ms. Dvorak), and Mr. Ralph Carter (Mr. Carter).                     
               Due to the death of his son in 1985, petitioner decided that           
          he wanted to sell his interest in the law partnership.  In 1985,            
          petitioner agreed to sell his partnership interest to other                 
          members of the law partnership.                                             
               A purchase agreement between petitioner and the law                    
          partnership (the purchase agreement) was executed by petitioner             




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