CMA Consolidated, Inc. & Subsidiaries, Inc. - Page 50

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          them under their end-user leases on the equipment directly to               
          HCA.  CFP allocated 99 percent of its income from the rent strip            
          sale with HCA to the Iowa Tribe.                                            
               The net effect of the series of November 1994 transactions             
          described above in steps 1 through 7 was for virtually all rental           
          income realized from the rent strip sale to HCA to be attributed            
          to a nontaxable entity (the Iowa Tribe), with the rental payments           
          due thereafter under the existing end-user leases on the                    
          equipment to be paid to HCA.                                                
               8.  About 2 days later, on December 2, 1994, CFP sold for              
          $450,000 to Asset Residco, Inc. (Residco), CFP’s interests as to            
          (1) the first 2 years of the master lease residual period with              
          respect to the K-Mart end-user lease equipment and (2) the first            
          6 months of the master lease residual period with respect to the            
          Amoco end-user lease satellite dish equipment.  Residco, a                  
          Delaware corporation, was wholly owned by Klein (vice president             
          of EQ and managing partner of Capital Asset Partners).  CFP                 
          allocated 99 percent of the income from its sale of these                   
          residual interests to CFP’s 99-percent limited partner, the Iowa            
          Tribe.  Residco paid the $450,000 sale price for these residual             
          interests by issuing its $450,000 secured promissory note due               
          January 1, 1995.  Residco’s note was secured by the rental                  
          payments Residco would be entitled to receive under its master              
          lease residual interests with respect to the K-Mart and Amoco               






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