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For 1996, CMACM claimed a $469,221 cost basis in its 25-
percent portion of the Jenrich note transferred to Lexington. In
addition, CMACM claimed a $459,221 loss from its partial
disposition of that note. CMACM also deducted $414,041 for the
over lease rental payments that it reported as being paid to
Jenrich during 1996. The $414,041 amount equaled the amount due
CMACM from Jenrich under the Jenrich installment note.
8. On September 1, 1997, CMACM transferred to Lexington the
remaining 75 percent of its interests and obligations under
various agreements concerning the Shared end-user lease
equipment. Among other things, CMACM transferred: (1) The
remaining 75 percent of CMACM’s over lease rights in the Shared
equipment, and (2) 75 percent of that portion of the Jenrich note
attributable to the Shared equipment. In exchange for CMACM’s
transfer, Lexington issued its $1,000 unsecured promissory note
to CMACM and assumed 75 percent of that portion of CMACM’s over
lease rental payment obligation to Jenrich attributable to the
Shared equipment. Pursuant to the terms of the unsecured note,
Lexington promised to pay CMACM $1,000, plus 8 percent interest
on December 31, 2002.
For 1997, CMACM claimed a $1,179,013 basis in the 75-percent
portion of the Jenrich note it transferred to Lexington and a
$1,178,013 loss from the partial disposition of the note. CMACM
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