Jean W. Lange and Jeanne P. Lange - Page 3

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          acquiring the Bank stock.  To compensate for this disparity,                
          Elmer received 1,200 more shares of Madison preferred stock than            
          petitioner.  The Madison stock was issued as follows:                       
                              Common Shares Preferred Shares                          
                    Elmer          1,648          15,216                              
                    Petitioner     1,648          14,016                              
               The preferred stock provides for a 50� per share, non-                 
          cumulative, preferred dividend.  On dissolution, each share                 
          entitles the holder to receive a $100 liquidation preference over           
          the common stock, but the holder is not entitled to receive                 
          proceeds in excess of the $100 preference.  Finally, the                    
          preferred stock is voting stock.                                            
               Despite the inequality in their ownership positions, Elmer             
          and petitioner treated each other as equal partners.  When the              
          Bank suffered financial reverses in the 1980's, petitioner and              
          Elmer contributed equal amounts ($744,000 each) to Madison.                 
          These funds were used to strengthen the Bank financially.                   
          Petitioner was more involved with the Bank's daily operations,              
          and Elmer acquiesced to petitioner's management decisions.  The             
          record indicates that the brothers intended to equalize their               
          respective ownership positions in Madison at some future time.              
          None of the family members, other than the two brothers, was                
          aware of the disparity in stock ownership.                                  
               In 1983, the brothers executed a buy/sell agreement to                 
          provide for the disposition of Madison stock upon the death of              

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