CMA Consolidated, Inc. & Subsidiaries, Inc. - Page 63

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          also deducted $237,853 (which was equal to the amount due CMACM             
          from Jenrich under the Jenrich installment note) as over lease              
          rental payments that it claimed to have paid to Jenrich during              
          1997.                                                                       
          D.  Other Aspects of Petitioner’s Claimed Losses and                        
          Deductions With Respect to the Second Lease Strip Deal                      
               As a result of the second lease strip deal and CMACM’s                 
          partial dispositions of the Jenrich note over a 21-month period,            
          petitioner claimed more than $4.2 million of deductions for                 
          1995, 1996, and 1997.  Petitioner did not report any income from            
          Okoma’s and Lexington’s assumptions of CMACM’s over lease rental            
          payment obligations to Jenrich.  In addition to $3,620,059 of               
          losses claimed for dispositions of the Jenrich note, petitioner             
          claimed deductions of $414,041 (1996) and $237,853 (1997) for               
          over lease rental payments to Jenrich.  In almost all of the                
          above-described second lease strip deal transactions, petitioner            
          either received or was entitled to receive an offsetting payment            
          equal to the amount it was obligated to pay and deducted.  In               
          only one instance, involving the purported section 351 transfer,            
          did petitioner assume $215,000 of the $750,000 CAP note owed to             
          EQ, without receiving or being entitled to receive an equivalent            
          offsetting amount.                                                          










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