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to pay interest to EMI in the total amount of $492,116.06
during each of the years 1984 and 1985 computed as follows:
Loan Rate Annual Interest
U.S. Home properties $863,25014.625 $126,250.31
Pitman & Japhet properties 2,590,200 14.125 365,865.75
Total 3,453,450 492,116.06
EA 84-III was also obligated under the 84 partnership
agreement to pay interest at the annual rate of 15 percent
to compensate the general partner for unsecured advances of
funds to the partnership. The returns filed on behalf of
EA 84-III for the years in issue report the following
liabilities to the general partner on Schedule L:
Due to
Taxable Year Ended General Partner Accrued Interest–-G/P
12/31/83 -0- -0-
12/31/84 $165,481 $28,174
12/31/85 373,705 42,750
EA 84-III reported noninvestment interest expense on
its returns for the years in issue of $118,082, $552,466,
and $545,848, respectively. The difference between these
amounts and the interest paid or incurred with respect to
the partnership's first mortgage notes is as follows:
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