Archie L. and Louise B. Honbarrier - Page 13




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          ownership in Central on December 22, 1993.  The amounts to be               
          distributed to the various shareholders were as follows:                    
               Shareholder         Allocable Amount of Distribution                   
               Mr. Honbarrier                $5,042,772                               
               Mrs. Honbarrier               23,102                                   
               Gary L. Honbarrier            967,063                                  
               Linda Embler                   967,063                                 
               Total                         7,000,000                                
               With the exception of the amount allocable to Mr.                      
          Honbarrier, all of the declared distributions were paid by check            
          on December 31, 1993.  Central made the $5,042,772 distribution             
          to Mr. Honbarrier in two parts.  The first part was paid via a              
          $493,626 check drawn on Central’s account on December 31, 1993.             
          Thus, the cash distributions made to Mr. Honbarrier and the other           
          shareholders on December 31, 1993, totaled $2,450,854.8  The                
          second part of the distribution to Mr. Honbarrier was made on               
          January 3, 1994, and consisted of $4,549,146 in tax-exempt                  
          bonds.9  The tax-exempt bonds distributed to Mr. Honbarrier on              
          January 3, 1994, were the same bonds acquired by Central from               
          Colonial in the merger.                                                     
               For Federal income tax purposes, petitioners treated the               
          merger as a tax-free reorganization within the meaning of section           
          368(a)(1)(A) and treated the $7 million distribution as a                   


               8The cash and cash equivalents that Central received from              
          Colonial on Dec. 31, 1993, totaled $2,472,047.                              
               9The parties have stipulated that Mr. Honbarrier was in                
          actual or constructive receipt of his entire $5,042,772 share of            
          the distribution at the close of 1993.                                      





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