ASA Investerings Partnership, Alliedsignal Inc., Tax Matters Partner - Page 23

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             and ASIC's respective interests to 65.87 and 1.13 percent.                                           
                    Throughout the venture, AlliedSignal and ABN carefully                                        
             calculated the shortfall between ABN's specified return and                                          
             Barber's and Dominguito's income allocations.  On its 1990                                           
             financial records, AlliedSignal recorded the shortfall as an                                         
             accrued liability, thereby treating the amount as a present                                          
             obligation.  On December 5, 1991, after calculating a shortfall,                                     
             AlliedSignal paid ABN $1,631,250.  The payment consisted of:                                         
             $765,147 (i.e., the difference between ABN's funding cost and                                        
             Barber's and Dominguito's combined income allocations); $231,250                                     
             (i.e., interest on $92 million of ABN funds that remained in ASA                                     
             until November, rather than March 1991, as had been established                                      
             in the Bermuda agreement); and $634,853.  The $634,853 payment                                       
             was the difference between the $5 million ABN requested that                                         
             AlliedSignal pay "up-front" and the $4,400,000 AlliedSignal paid                                     
             on August 2, 1990, plus interest.  AlliedSignal and ABN had                                          
             considered making this payment in the form of a "consulting fee",                                    
             but they ultimately decided against this characterization.                                           
                    On April 8, 1992, ASA redeemed 8 percent of ASA from                                          
             Dominguito for $76,961,863.  After the distribution, the ASA                                         
             interests held by AlliedSignal, ASIC, and Dominguito were 73.74                                      
             percent, 1.26 percent, and 25 percent, respectively.                                                 
             IX.  ASA Is Liquidated                                                                               
                    During April and May 1992, AlliedSignal representatives and                                   





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