Corbin West Ltd. Partnership, CDC Equity Corp., Tax Matters Partner - Page 3




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          I.  Acquisition of the Property                                             
               Corbin West was formed to purchase, manage, and syndicate              
          the Corbin West Apartments (the property).  From approximately              
          March 17, 1970, until December 23, 1988, Norman Associates                  
          (Norman) owned the property.                                                
               On December 8, 1987, Corbin West entered into an option                
          agreement (the first option) with Norman to purchase the property           
          for $1,760,000.  On or about December 9, 1987, CDC, acting on               
          behalf of Corbin West, applied for a reservation of a Federal               
          low-income housing tax credit relating to the property with the             
          Connecticut Housing Finance Authority (CHFA application).  The              
          CHFA application reflected a total acquisition cost of $1,760,000           
          plus estimated development and/or rehabilitation costs of                   
          $1,698,315.  Corbin West was unable to obtain the financing                 
          required for rehabilitation of the property and allowed the first           
          option to lapse on April 1, 1988.                                           
               Corbin West remained interested in obtaining the property.             
          With the help of its attorneys, Corbin West devised a new plan to           
          acquire the property.  Under the plan, Norman would sell the                
          property to a charitable organization for a price below an                  
          alleged fair market value and take a charitable contribution                
          deduction for the difference between the sale price and the                 
          alleged fair market value.  The charitable organization in turn             
          would sell the property to Corbin West.  Corbin West would                  
          reimburse the charitable organization for the cash paid to Norman           
          to acquire the property and execute a promissory note for the               

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