Interhotel Company, LTD., Torrey Hotel Enterprises, Inc., Tax Matters Partner - Page 31

                                        -31-                                          
          allocated to THEI and 15 percent, or $217,404, would be allocated           
          to Dondi. These allocations, when added to the previously                   
          accumulated capital accounts, result in a total capital of                  
          $16,328,755--the amount of the previously identified liquidation            
          proceeds.                                                                   
               Petitioner maintains that a liquidation of all of IHCL's               
          assets at the end of 1991 would yield proceeds of $17,887,056.              
          This amount is computed as follows:                                         
                    12-31-91 Deemed Liquidation                                       
                    Cash                          $9,098,388                          
                    Organization costs                 39,388                         
                    Note receivable from THEI          2,619,833                      
                    Investment in Pacific Gateway      2,660,677                      
                    Investment in Pacific Landmark     (3,967,304)                    
                    Liabilities                        (1,847)                        
                    Subtotal                      10,449,135                          


                    1991 Minimum gain chargeback                                      
                    from Pacific Landmark              7,437,891                      

                    Distributable liquidation                                         
                    proceeds at book value 12-31-91  17,887,026                       
               This $17,887,026 amount is $1,558,301 more than that for the           
          previous year (1990), consisting of an additional $67,914 in                
          minimum gain chargebacks, plus partnership income for 1991 of               
          $1,490,387. The total liquidation proceeds, as determined by                
          petitioner, would again eliminate THEI's negative capital account.          
          These allocations, when added to the previously accumulated capital         
          accounts, result in a total capital of $17,887,056--the amount of           





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