Estate of Harvey Feinsmith, Deceased, Betty Feinsmith, Executrix - Page 8




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               income tax returns for the period February 1, 1980 to                  
               the present, attaching the affidavit to the returns as                 
               an exhibit, no later than December 31, 1985.                           
                                                                                     
               Pursuant to the cooperation agreement, Mr. Feinsmith filed             
          an amended 1983 personal income tax return on January 6, 1986.              
          He reported on that return additional income of $31,667,                    
          representing what he believed was his 1/3 share of Randy Hall’s             
          false invoice deduction attributable to its taxable year ended              
          January 31, 1983.  Mr. Feinsmith’s 1/3 share was actually                   
          $31,399.81.  The parties agree that $31,399.81 is a constructive            
          dividend to Mr. Feinsmith for 1983, arising out of deductions not           
          allowable on Randy Hall’s 1982 corporate income tax return.                 
               Pursuant to the cooperation agreement, Randy Hall filed an             
          amended 1983 return on January 7, 1986.  Randy Hall reported on             
          that return a $49,179 increase in income resulting from its                 
          reduction of its cost of goods sold as originally reported.                 
          Randy Hall acknowledged on the return that the reduction was                
          required because it had originally included in its cost of goods            
          sold computation nonexistent business deductions totaling                   
          $337,300.  Randy Hall reported that the following shareholders              
          had “ADDITIONAL INCOME ARISING FROM THE AFOREMENTIONED                      
          DEDUCTIONS” in the corresponding calendar years:3                           




               3 The total of some of the rows and columns is off by $1.              
          This discrepancy is attributable to rounding.                               





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