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Mr. Carter under a consulting agreement of $200,000 of the total
$800,000 that AST was willing to pay for MSSTA's assets; and
(3) based on the tax law relating to capital gains, the Scotts
would owe tax on the capital gains that they would realize when
MSSTA made liquidating distributions to them as 48-percent
stockholders of MSSTA of approximately $300,000, which tax would
be equal to about one-third of such gains. Because of that cap-
ital gains tax that the Scotts would owe, they would not have
sufficient cash from the MSSTA transaction to purchase the entire
33-percent stock interest in AST which they wanted to acquire and
to which Mr. Harrison, Mr. Hall, and AST had tentatively agreed,
and they would have to make other arrangements to buy that stock
interest, such as guaranteeing the loan that AST would have to
obtain in order to finance in part its purchase of MSSTA's as-
sets. Mr. Hall cautioned Mr. Scott that, because Mr. Hall was
not familiar with either MSSTA's or the Scotts' tax situation,
Mr. Scott should consult a tax adviser to review the MSSTA
transaction and to advise them about the tax consequences to
MSSTA and the Scotts as a result of that transaction.
Mr. Scott told Mr. Hall that he did not intend to pay any
taxes as a result of the MSSTA transaction. To accommodate Mr.
Scott, Mr. Harrison and Mr. Hall told Mr. Scott that the form of
the MSSTA transaction could be changed to the following: AST
would transfer directly to MSSTA $300,000, instead of $600,000,
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