Allie Ray McCullen and Shurley G. McCullen - Page 7

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          since then.  From 1968 to the date of trial petitioner                      
          significantly improved his poultry facilities, which he financed            
          with short-term unsecured loans from financial institutions.                
          Petitioner used the proceeds from his loans from New-East Bank,             
          Bank of Stanley, Southern National Bank, and First Citizens Bank            
          to finance his farm operations.  Petitioner sometimes farmed on             
          real property that he had bought to resell but had not yet sold.            
               Petitioner's farming activities were profitable in 1990 and            
          1991.  However, petitioner's farm had losses for several years              
          before the years in issue.  He paid his farming expenses from any           
          of his bank accounts that had funds.  He also borrowed money to             
          pay interest on loans.  Petitioner did not keep records showing             
          how he used the proceeds of each loan.                                      
               Petitioner's only loan by wire transfer was from the Bank of           
          Stanley.  Petitioner used the proceeds of that loan to pay farm             
          operating expenses.                                                         
               In 1990, petitioner owned three tractors, a bail wagon, and            
          various implements such as plows, disks, a hay bailer, and a                
          rake.  He financed the maintenance and replacement of equipment             
          with short-term unsecured signature loans from financial                    
          institutions.                                                               
          D.  New-East Bank                                                           
               Petitioner was a founder, original organizer, stockholder,             
          and director of New-East Bank.  Petitioner, Godwin, and Jim Cain            
          (not otherwise described in the record) organized New-East Bank             




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