Lucian T. Baldwin, III - Page 17




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          Petitioner’s Attempt To Sell Granot Loma                                    
               In 1989, petitioner decided to sell Granot Loma.  His                  
          decision to do so was influenced by his marital problems and a 1-           
          day trading loss of approximately $5 million.  In early 1990,               
          Gary Walker, an appraiser, valued the property in excess of $10             
          million.  On April 30, 1990, after discussions and negotiations             
          with several real estate brokers, petitioner listed Granot Loma             
          with a broker for an asking price of $12 million.  Although the             
          property generated considerable interest, no reasonable offers              
          were received.  Petitioner renewed the listing once and then                
          allowed it to expire during 1991.                                           
               On his financial statement dated May 31, 1992, petitioner              
          reported the value of his interest in LFI as $4,551,888.  During            
          the pendency of his divorce, petitioner obtained an appraisal of            
          Granot Loma that valued the fee simple interest in the property,            
          as of July 28, 1992, at $3,800,000.  That appraisal identified              
          petitioners as the owners of Granot Loma.                                   
          BAC                                                                         
               On May 20, 1988, petitioner purchased a Beechcraft King Air            
          200 (King Air) and formed BAC to own and operate the King Air.              
          Articles of incorporation for BAC were prepared and filed in                
          North Carolina the same day.  On August 24, 1988, BAC traded its            
          King Air for a Sabreliner jet (the Sabre). Petitioner hired                 
          professional pilots to fly the Sabre.                                       






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