Jonathan B. Geftman - Page 8

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          ended February 28, 1985, reflect a $2,029,390 entry for the La              
          Playa Condominium mortgages and a $79,990 accrued mortgage                  
          receivable for the mortgages through March 16, 1985.  The journal           
          indicates that these mortgages were transferred from the estate             
          to the trusts as a "partial debt settlement".  All transfers of             
          mortgages were accomplished by book entries on the records of               
          Berkley.                                                                    
               Berkley made intermittent transfers of funds to the trusts.            
          Berkley made the following transfers to the trusts during the               
          fiscal year ended February 28, 1985:                                        
                    Oct. 17, 1984       $12,000                                       
                    Nov.  9, 1984       5,000                                         
                    Jan.  4, 1985       25,000                                        
                    Jan. 29, 1985       1,000                                         
                    Feb.  5, 1985       14,000                                        
                    Feb. 14, 1985       1,000                                         
                    Feb. 20, 1985       1,000                                         
                   Total               59,000                                        
          Berkley's transfers of funds to the trusts were noted in the                
          trusts' ledger under the "Berkley Mortgage Corporation" account.            
               The estate had no distributable net income (DNI) in its                
          fiscal years ended March 31, 1984 and 1985.  For its fiscal year            
          ended March 31, 1985, the estate's Form 1041, U.S. Fiduciary                
          Income Tax Return, reported negative total income of $327,946.              
          Trust C reported DNI of $101,890 on its Form 1041 for its taxable           
          year ending February 28, 1985.                                              
               During 1985, Trust C distributed $46,936 to petitioner, and            
          $52,101 remained in a brokerage account in petitioner's name on             





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