Donald J. Janda - Page 2



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               Section references are to the Internal Revenue Code in                 
          effect for the year in issue.  Rule references are to the Tax               
          Court Rules of Practice and Procedure.                                      
                                  FINDINGS OF FACT                                    
               Some of the facts have been stipulated and are so found.               
          The stipulations of fact and the attached exhibits are                      
          incorporated herein by this reference.  At the time of the                  
          petition, petitioners resided in St. Edward, Nebraska.                      
               In 1992, the Company operated as a holding entity, owning              
          94.6 percent of 2,250 shares of stock outstanding in the Bank of            
          St. Edward (the Bank).  The Bank served the financial needs of a            
          small agricultural community in Nebraska.  Mr. Janda operated the           
          Bank in the capacity of president, while Mrs. Janda, involved as            
          well in the day-to-day activities of the Bank, served as vice               
          president.  The Bank employed Kenneth Wolfe in the position of              
          “cashier” as well as three to four tellers.  As of December 31,             
          1992, the stockholders’ equity in the Bank was listed at an                 
          unadjusted book value of $4,518,000, or $2,008 per share.                   
               In November 1992, petitioners each made gifts of 6,850                 
          shares of stock in the Company (transferred block of stock) to              
          each of their children (Robert Janda, Donald Janda, Jr.,                    
          Catherine Moeller, and Constance Janda).  At the time of the                
          gifts, the Company had 130,000 shares of stock outstanding.  Each           
          transferred block of stock therefore constituted a 5.27-percent             
          interest in the Company.                                                    






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