Nathan P. and Geraldine V. Morton - Page 2

                                        - 2 -                                         
             Unless stated otherwise, all section references are to                   
             the Internal Revenue Code as in effect for 1989.  After                  
                       concessions, the issues remaining for decision                 
             are:    (1) Whether the fair market value of the capital                 
             stock of Soft Warehouse, Inc. ("SWI"), on June 30, 1989,                 
             was $60.98 per share as petitioners contend, or $1,739.82                
             per share as determined by respondent; and (2) whether                   
             petitioners are liable for the accuracy-related penalty                  
             prescribed by section 6662(a).                                           

             Respondent's Motion in Limine                                            
                  As a preliminary matter, we must decide respondent's                
             motion in limine wherein she asks the Court to overrule                  
             certain evidentiary objections reserved by petitioners in                
             the stipulation of facts.  Petitioners object to the                     
             admission of the following joint exhibits:                               

                  1.   A memorandum prepared by Dubin Clark &                         
                       Co., Inc. ("Dubin Clark"), describing                          
                       its 1989 purchase of SWI;                                      
                  2.   A memorandum prepared by Continental                           
                       Illinois National Bank and Trust Co. of                        
                       Chicago ("Continental Bank") for the                           
                       purpose of approving financing for                             
                       Dubin Clark's purchase and subsequent                          
                       expansion of SWI;                                              
                  3.   A valuation of a noncontrolling equity                         
                       interest in SWI as of March 31, 1990,                          
                       prepared by KPMG Peat Marwick and dated                        
                       June 14, 1990;                                                 

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