Highland Farms, Inc. and Subsidiary - Page 13

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               Each of the four types of lodge accommodations required                
          payment of an entry fee and monthly rent in accordance with a               
          rental contract.  Petitioner could revise the monthly rent with a           
          minimum of 30 days' notice to the lodge residents.  Separate                
          payments were made for the meal service, medical costs, and other           
          services.  The rental contract did not specify the length of the            
          agreement.  The rights to terminate the contract of both                    
          petitioner and the resident were similar to those rights under              
          the apartment rental contract.                                              
               The entry fees and monthly rent (exclusive of meals) for the           
          lodge units during 1988 were as follows:                                    
               Type of Unit        Entry fee      Monthly Rent                        
               Single Room         $25,000        $425                                
               Studio Apartment    26,500         452                                 
               Expanded Studio     35,000         632                                 
               One Bedroom         52,000         844                                 
          Petitioner collected the entire entry fee before the resident               
          moved into a lodge unit.  If the entry fee was received more than           
          60 days prior to the date of occupancy, the contract called for             
          petitioner to credit the resident with interest at the rate of 10           
          percent per annum for the period between the date of deposit and            
          the date of occupancy.                                                      
               If the prospective resident terminated the contract prior to           
          occupancy, petitioner refunded the entry fee plus any interest,             
          less a discount of 5 percent of the entry fee.  If the tenant               
          terminated the contract or died within the first 20 years of                





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