Margaret Hancock - Page 5

          Hancock Enterprises sometimes held back (i.e., did not sell) some            
          lots that were harder to sell from each subdivision.                         
               3.   Accountants and Bookkeeper                                         
               Toback & Co., C.P.A.'s (Toback), were the accountants for               
          Hancock Enterprises.  John J. Gorman, Jr. (Gorman), began                    
          handling the Hancock Enterprises account in 1981.  Toback                    
          prepared all of the Hancock Enterprises returns from 1973 to 1986            
          and prepared petitioner's individual tax returns from 1987 to                
          1994.  Petitioner worked closely with Toback's accountants,                  
          including Gorman.  She met with Gorman nearly monthly from 1981              
          to 1985.  Her husband met with Gorman once or twice from 1981                
          until he died in December 1985.                                              
               Hancock Enterprises stopped building houses in 1982 or 1983             
          and began selling its lots because interest rates were 18 and 19             
          percent.  It laid off its superintendents, foremen, and                      
          architects.  Hancock Enterprises had about 115 lots when it                  
          stopped building homes.                                                      
               4.   Building Industry in Phoenix                                       
               The homebuilding market in Phoenix peaked around 1984-86.               
          The number of building permits issued in Phoenix declined from               
          then until 1990.  Residential real estate prices also declined               
          after 1986.  High interest rates caused some buyers to abandon               
          their deposits on lots.  Hancock Enterprises' buyers canceled                
          contracts for three lots in the Summer Shadows subdivision                   

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