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Legal and accounting --- 10,979.51
These payments were made in order to continue petitioner's
insurance sales business activity during and after the ruin of
the Mid-Continent corporations.
After the situation of the Mid-Continent corporations began
to deteriorate, Roy and petitioner considered purchasing an
insurance agency to generate business and to ameliorate their
problems. Home was requested to evaluate the Riley Insurance
Agency (Riley), and he supplied a report, dated August 29, 1983,
to Roy and petitioner. After some negotiations through legal
counsel, an agreement was reached, and Roy paid $500 as earnest
money or a downpayment sometime during the period September
through November 1983.
On March 28, 1984, Roy executed a written contract with Gwen
Riley to pay $135,000 for Riley. The $135,000 price had been
formulated and agreed upon during 1983. The $134,500 balance of
the contract price was remitted by Roy to Gwen Riley during March
1984. Roy and petitioner had agreed in 1983 to each end up
owning one-half of Riley, and that agreement was committed to
writing during April 1984. Petitioner paid Roy $67,500 for one-
half of Riley by checks during the spring of 1984.
Petitioner claims a $90,000 offset against his 1983 income
for repayment of preincorporation expenses reimbursement received
in 1982. Petitioner and Roy agreed to pay $5,000 per month to
the Mid-Continent corporations from the revenues of Riley. The
agreements were reduced to writings that recited that the Mid-
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