Estate of Albert Strangi - Page 10

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          $250,000, $400,000, and $100,000, respectively.  In January 1997,           
          SFLP increased John Strangi’s line of credit to $350,000 and                
          Albert T. Strangi’s line of credit to $650,000.  In November                
          1997, SFLP advanced to decedent’s estate $2.32 million to post              
          bonds with the Internal Revenue Service and the State of Texas in           
          connection with the review of decedent’s estate tax return.  In             
          1998, SFLP made distributions of $102,500 to each of the Strangi            
          children.  The Strangi children had received $2,662,000 in                  
          distributions from SFLP as of December 31, 1998.                            
          Estate Tax Return                                                           
               On January 16, 1996, decedent’s Form 706, United States                
          Estate (and Generation Skipping Transfer) Tax Return (estate tax            
          return), was filed by Mr. Gulig.  On the estate tax return,                 
          decedent’s gross estate was reported as $6,823,582.  This                   
          included a $6,560,730 fair market value for SFLP.  For purposes             
          of the estate tax return, SFLP was valued by Appraisal                      
          Technologies, Inc., on an “ongoing business”, “minority interest            
          basis”.  The valuation report arrived at a value before discounts           
          and then applied minority interest discounts totaling 33 percent            
          for lack of marketability and lack of control.                              
               The estate tax return also indicated that decedent had                 
          $43,280 in personal debt and other allowable deductions totaling            
          $107,108, leaving a reported taxable estate of $6,673,194.  The             
          estate tax return reported a transfer tax due of $2,522,088.  The           

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