Eugene D. Lanier, Inc. - Page 3

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          I.  Sale of the Property                                                    
               Beginning in 1969, the Corporation was a franchised Toyota             
          automobile dealership d/b/a Acadian Toyota.  The Corporation                
          leased property located at 3203 Johnston Street in Lafayette,               
          Louisiana, from 1969 to 1978.  In August 1978, the Corporation              
          acquired the property and improvements located at 5001 Johnston             
          Street, Section 64, T10S-R4E, in Lafayette (the Property), for              
          $566,034 and moved to that address.  Beginning in 1979, the                 
          Corporation was also a franchised Volvo automobile dealership               
          d/b/a Acadian Toyota-Volvo.                                                 
               During the taxable year 1987, the Laniers were the                     
          Corporation's sole shareholders.  G. Talbott Robertson                      
          (Robertson), a certified public accountant, informed the Laniers            
          in late 1986 that a "precipitous" decline in real estate values             
          in Lafayette presented the potential opportunity to transfer                
          ownership of the Property from the Corporation to the Laniers               
          without incurring a large tax cost.  To that end, Robertson                 
          encouraged the Laniers to seek an appraisal of the Property.                
               The Corporation hired Warren G. Monies (Monies) to appraise            
          the Property.  On February 16, 1987, Monies issued an appraisal             
          report which estimated the FMV of the Property to be $424,085 as            
          of that date.  Mr. Lanier said that at the time he "thought it              
          [the appraisal] was low."                                                   
               After receiving Monies' appraisal, the Laniers instructed              
          their attorney to use the selling price of $425,000 in a Credit             

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