CMA Consolidated, Inc. & Subsidiaries, Inc. - Page 61

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          $1,982,825.  The $1,982,825 rental deduction, in conjunction with           
          other items on petitioner’s 1995 Federal return, resulted in a              
          $404,000 net operating loss (NOL) carryover from the 1995 to the            
          1996 tax year.  Respondent, in the notice of deficiency,                    
          disallowed the $404,000 NOL carryover.                                      
               7.  On October 31, 1996, CMACM transferred 25 percent of its           
          interests and obligations in the Shared end-user lease to First             
          Lexington Leasing, Inc. (Lexington).  From 1998 to the time of              
          trial Lexington was owned by Asset Leasing Partners I, LP, with             
          Crispin and CMACM as managing general partners and the Iowa Tribe           
          as a limited partner.  Among other things, CMACM transferred:               
          (1) Twenty-five percent of CMACM’s rights in the Shared                     
          equipment, and (2) 25 percent of that portion of the Jenrich note           
          attributable to the Shared equipment.  In exchange for CMACM’s              
          transfer, Lexington issued a $10,000 unsecured promissory note to           
          CMACM and assumed 25 percent of that portion of CMACM’s over                
          lease rental payment obligation to Jenrich attributable to the              
          Shared equipment.  The promissory note had an 8-percent interest            
          rate and was due on December 31, 2002.                                      
               Lexington was incorporated in California during 1995 and was           
          wholly owned by Richard Koehler (Koehler), a friend and longtime            
          business associate of Crispin.  Before and after the CMACM-                 
          Lexington transaction, Koehler depended on petitioner and Crispin           
          for funds to keep CMA Capital Corp. operating.                              






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