Stanley M. Kurzet and Anne L. Kurzet - Page 22

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                 Petitioners allege that from 1984 through 1994 their                                
            cumulative cash expenditures relating to purchase and                                     
            improvements undertaken on the Tahiti Property totaled                                    
            $1,760,000.                                                                               

            Lear Jet                                                                                  
                  In 1984, because of anticipated frequent travel, petitioner                         
            purchased a Lear jet airplane for $2 million.  The Lear jet was                           
            used by petitioners for personal travel and to travel to                                  
            petitioners' timber farm in Oregon, to petitioners' Tahiti                                
            Property, to computer symposiums, to machinery auctions, to pick                          
            up equipment and parts needed in petitioners' various activities,                         
            and to Park City, Utah, where petitioners skied and eventually                            
            bought two condominiums and two vacant lots, on one of which                              
            petitioners built a large personal residence.                                             
                  When traveling to the timber farm and to the Tahiti                                 
            Property, petitioner often would transport in the Lear jet                                
            equipment and supplies that would be used at the timber farm and                          
            on the Tahiti Property.  Occasionally, other family members would                         
            travel with petitioners in the Lear jet.                                                  
                  During 1987 through 1989, the first-class air fare between                          
            Orange, California, where petitioners’ primary residence was                              
            located, and North Bend, Oregon, the airport closest to                                   
            petitioners' timber farm, was approximately $1,600 per person.  A                         
            commercial airplane trip between these two cities would take                              





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