Myer B. Barr and Estate of Diana L. Barr - Page 4

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               Jeffrey expected that he would be repaid in approximately 18           
          months.  The repayment was to be made from certain insurance                
          proceeds that Super City Meats was to receive.  The insurance               
          proceeds were from policies on Stephen's business partner, the              
          executive manager and other 50 percent co-owner of Super City               
          Meats, who had been murdered on the business premises in July of            
          1990.  During that time, Super City Meats was also having                   
          problems with sales and collecting receivables due to alleged               
          pressure from the Chinese mafia.  When Jeffrey advanced Stephen             
          the $100,000, he was aware that Stephen's business partner had              
          been murdered.                                                              
               Petitioner is a graduate of the University of Pennsylvania             
          and Harvard Law School.  At that time, petitioner was retired and           
          invested in various fields, especially mutual bond funds.  On               
          February 28, 1991, petitioner and Jeffrey executed an agreement             
          where Jeffery transferred to petitioner his rights created under            
          the note for $100,000.2  Petitioner testified that he acquired              
          the note because he considered it a good investment.  Petitioner            
          testified that at that time his investments paid between 7 and 9            
          percent interest, and the original 13 percent interest on the               
          note was an attractive investment.  On their 1993 Federal income            
          tax return, petitioners reported taxable interest of $73,672 and            
          tax-exempt interest of $207,628.  In addition, petitioners                  

               2    Petitioners' 1993 Federal income tax return, however,             
          indicates an acquisition date of Sept. 13, 1990.                            

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