Epic Associates 84-III, William C. Griffith, Jr. - Page 114




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             funds to the partnership.  The returns filed on behalf of                
             EA 83-XII for the years in issue report the following                    
             liabilities to the general partner on Schedule L, Balance                
             Sheets:                                                                  

                 Year Ended     Amount of Advances     Accrued Interest               
                  12/31/83       $2,991                   -0-                         
                  12/31/84       104,754             $7,147                           
                  12/31/85       57,567              12,929                           

                  EA 83-XII reported the following interest expense on                
             its returns for the years in issue:                                      

                                           1983         1984      1985                
             Interest (noninvestment)      $466,358   $539,893   $560,177             
             Investment interest income    66,366         -0-          -0-            
                                                                                     
                 Total                     532,724    539,893    560,177              

             The difference between the above amounts and the interest                
             paid or incurred with respect to the partnership's first                 
             mortgage notes is as follows:                                            

                                           1983         1984      1985                
             Total interest expense reported$532,724   $539,893   $560,177             
             Interest on first mortgage notes532,759    532,759   532,759               
             Difference                    (35)       7,134      27,418               

             The record of this case does not explain the above                       
             differences.                                                             









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