Investment Research Associates - Page 74




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         4.   Flow of Payments by the Five 1985 Through 1989                          
              After IRA transferred money from the Five to Carlco, TMT,               
         and BWK in 1984, the structure in which payments were received               
         from the Five changed.  The payments from Essex and Hyatt                    
         (through KWJ Partnership) were no longer reported as IRA's                   
         income.  Carlco, TMT, and BWK became partners of the Essex                   
         partnership and formed the KWJ Co. partnership.  Hyatt payments              
         were reported as income of KWJ Co. partnership.  Accordingly, the            
         payments from the Essex and KWJ Co. partnerships were reported on            
         the respective returns of Carlco, TMT, and BWK at that time, and             
         Carlco, TMT, and BWK were no longer members of the consolidated              
         group of IRA for tax purposes.                                               
         a.   Zeus 1984 Through 1988                                                  
              IRA's consolidated returns for 1984 through 1988 reported               
         the following income, net assets, and stockholder equity with                
         respect to Zeus:                                                             




















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