CMA Consolidated, Inc. & Subsidiaries, Inc. - Page 53

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          transactions.  On April 28, 2000, CFX Financial redeemed its                
          preferred stock held by CFP for $94,950.82, consisting of $75,000           
          for the shares and $19,950.82 in dividends thereon.                         
          C.  Second Lease Strip Deal                                                 
               Sometime before August 1995, Crispin asked Klein and certain           
          parties and/or entities involved in the first lease strip deal to           
          create another position out of the equipment package involved in            
          that first deal.  Although petitioner and Crispin were planning             
          to market this second lease strip deal to a customer, they                  
          changed their plans following the Internal Revenue Service’s                
          (IRS) issuance of Notice 95-53, 1995-2 C.B. 334, on October 30,             
          1995.  In Notice 95-53, supra, the IRS warned it would challenge            
          and disallow potential tax benefits that taxpayers claimed under            
          lease strip deals.  Due to the issuance of Notice 95-53, supra,             
          petitioner and Crispin concluded that it would not be possible to           
          sell the second lease strip deal to third parties.  Because the             
          transactions for the contemplated deal had already been                     
          consummated, petitioner and Crispin instead decided to complete             
          the second lease strip deal with petitioner as the “customer” or            
          ultimate beneficiary.                                                       
               The wraparound lease (over lease) in the second lease strip            
          deal involved the K-Mart and Shared end-user lease equipment and            
          encompassed the existing K-Mart and Shared end-user leases.                 
          However, the express lease term for the K-Mart and Shared over              






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