Andantech L.L.C., Wells Fargo Equipment Finance, Inc. (f.k.a. Norwest Equipment Finance, Inc.), Tax Matters Partner, and Wells Fargo & Co., A Partner Other Than the Tax Matters Partner, et al. - Page 6

                                        - 6 -                                         
                                   Residual Value Projections ..... 104               
                              vi. Insertion of Other Entities .... 106                
                    4.   The Transaction Was Not a Sale and the                       
                         Financing Did Not Constitute Genuine Debt .. 108             
               D. Conclusion .................... 112                                 
               APPENDIX A ....................... 114                                 

                       MEMORANDUM FINDINGS OF FACT AND OPINION                        

               JACOBS, Judge:  Respondent issued Andantech, L.L.C.                    
          (Andantech), a limited liability Wyoming company, notices of final          
          partnership administrative adjustment (FPAAs) that reflected                
          adjustments to Andantech’s partnership returns for taxable years            
          which ended on December 10, 1993 (the 12/10/93 FPAA), December 31,          
          1993 (the 12/31/93 FPAA), and December 31, 1994 (the 12/31/94               
               These consolidated cases involve an equipment sale-leaseback           
          transaction that is described in flow chart form, in attached               
          appendixes A through G.  The transaction is designed to produce tax         
          benefits to RD Leasing, Inc. (RD Leasing), a member of an                   
          affiliated group in which Norwest Corp. (Norwest) is the common             
          parent, through RD Leasing’s membership in Andantech.                       
               The substantive issue to be resolved is whether the sale-              
          leaseback transaction involved herein should be respected for               
          Federal tax purposes.                                                       
               All section references are to the Internal Revenue Code as in          
          effect for the years in issue.                                              

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