Johannes M. Schalekamp - Page 4

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          12 parcels of unimproved real property located in Hernando,                 
          Citrus, Volusia, and Marion Counties, Florida (the 12 parcels).             
          Ampel Corporation, Ltd. (Ampel), is a British Virgin Islands                
          corporation.  In December 1987, Ampel purchased the 12 parcels              
          from petitioner.  Ampel agreed to pay a total of $21 million for            
          the 12 parcels.  Petitioner received no cash from Ampel at the              
          time of sale, but he received 12 notes from Ampel, in various               
          amounts, one for each property, evidencing Ampel’s obligation to            
          pay the $21 million purchase price in installments, with interest           
          (the 1987 Ampel notes).  The 1987 Ampel notes are similar (at               
          least 11 are; one, inexplicably, is not in evidence), all calling           
          for both interest and principal payments beginning in January               
          1989.  A mortgage secures each note.  Petitioner reported the               
          sale of the 12 parcels on the 1987 return.  He reported that sale           
          under the installment method of accounting.  He reported a                  
          selling price of $21 million, an adjusted basis of $6,751,500,              
          commissions and other expenses of sale of $189,365, and no                  
          payment in 1987.                                                            
               Ampel did not make the 1989 payments to petitioner called              
          for in the 1987 Ampel notes.                                                
               Floridama Finance, Ltd. (Floridama), is a British Virgin               
          Islands corporation formed on February 24, 1989.  On March 2,               
          1989, Floridama purchased the 1987 Ampel notes from petitioner.             
          Floridama agreed to pay a total of $19,501,158.56 for the 1987              





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