Eugene D. Lanier, Inc. - Page 4

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          Sale executed on March 31, 1987, by which the Property was                  
          transferred to the Laniers.  The Laniers assumed the mortgage on            
          the Property (which had a balance of approximately $293,000),               
          paid $55,000 in cash, and executed a promissory note in favor of            
          the Corporation in the principal amount of $77,000.                         
               The Corporation reported the disposition of the Property on            
          its 1987 Form 1120, U.S. Corporation Income Tax Return, as being            
          a sale for an amount equal to its adjusted basis in the Property            
          as of March 31, 1987, or $423,468.  Accordingly, the Corporation            
          did not report any gain or loss on the transaction.  Likewise,              
          the Laniers did not report any income on their joint 1987 Form              
          1040, U.S. Individual Income Tax Return, as a result of their               
          purchase of the Property.                                                   
               The Corporation's earnings and profits for taxable year 1987           
          were $62,581.  The Corporation had accumulated earnings and                 
          profits as of January 1, 1987, totaling $622,124.                           
               From March 31 to September 28, 1987, the Property was owned            
          by the Laniers, but the premises were leased to the Corporation             
          at a rate of $10,000 per month.  The Corporation continued to own           
          and operate its franchised Toyota and Volvo automobile                      
          dealerships until September 28, 1987.  On that date, the                    
          Corporation ceased being a franchised Toyota and Volvo automobile           
          dealership d/b/a Acadian Toyota-Volvo and sold its assets to                
          Harvey, Inc. (Harvey).  Also on that date, the Laniers and Harvey           
          entered into a 10-year lease for the Property with an option in             

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Last modified: May 25, 2011