Michael T. Caracci and Cindy W. Caracci, et al. - Page 54




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          think that this factor substantially offsets the demographic                
          challenges of operating home health care agencies in Mississippi.           
               Petitioners also maintain that there was no market in                  
          Mississippi for acquisition of the Sta-Home tax-exempt entities.            
          The record in this case, however, indicates that there were many            
          such sales, including the purchase of Mississippi home health               
          care agencies by out-of-State hospitals.  We are not convinced              
          that reasonable exploration by a willing seller would have failed           
          to turn up a willing buyer, whether in Mississippi or elsewhere.            
               F.  Excess Value                                                       
               Having found the fair market value of the Sta-Home tax-                
          exempt entities, we turn to decide the value in excess of the               
          assumed liabilities.  We are satisfied that the Sta-Home for-               
          profit entities intended to, and did, assume all of the                     
          liabilities of the predecessor businesses.  The evidence includes           
          an audited balance sheet, prepared for purposes of this case,               
          which indicates that the total liabilities as of September 30,              
          1995, were $13,310,860.  To this amount we think there is                   
          properly added $201,000, as ascertained by Hahn, representing a             
          reserve account for cost claims disallowed by Medicare.  Total              
          liabilities assumed were therefore $13,511,000.  Subtracting the            
          total liabilities from the fair market value we have decided,               
          results in an excess of $5,164,000:                                         
                    Fair market value        $18,675,000                              
                    Assumed liabilities                (13,511,000)                   





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