Dakotah Hills Offices Limited Partnership, An Arizona Limited Partnership, William M. and Dianne B. Stephens, Tax Matters Partners, et al. - Page 5

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             and Certificate of Limited Partnership of Dakotah Hills was              
             filed with the Arizona Secretary of State (partnership                   
             agreement).  It was established to acquire a parcel of                   
             property from another partnership with the same general                  
             partners, Sierra Sunrise Limited Partnership, and to                     
             complete the construction of an office building on the                   
             property for the purpose of leasing the office building to               
             one of its general partners, the JNC Companies.  The                     
             property consisted of approximately 1.113 acres of land                  
             located in the metropolitan Tucson, Arizona, area.  As part              
             of the transaction, the seller agreed to assign to Dakotah               
             Hills a lease of the office building to the JNC Companies                
             for a term of 7 years with an option to renew for 3 years.               
             A stated objective of the limited partnership was to hold                
             the real property until the expiration of the lease and                  
             then to sell it at a gain.                                               
                  In addition to the capital contributed by the four                  
             general partners, in the aggregate amount of $1,000,                     
             Dakotah Hills was capitalized by the sale of 35 units of                 
             limited partnership interest for $26,000 per unit.  The                  
             purchaser of each limited partnership unit paid $5,200 in                
             cash and issued a promissory note for the balance of the                 
             principal amount of $20,800.  The promissory note was                    
             payable to the partnership, without interest, in four                    
             annual installments of $5,200 each commencing on October 1,              




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