CMA Consolidated, Inc. & Subsidiaries, Inc. - Page 66

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          various grounds the tax benefits that taxpayers claimed under               
          lease strip deals.  Until the issuance of Notice 95-53, supra,              
          petitioner and Crispin were contemplating the marketing of the              
          second lease strip deal.  Following Notice 95-53, supra, Crispin            
          concluded it would not be possible to sell that second deal to a            
          third party, and instead decided to have petitioner become the              
          customer/user of the tax benefits from the second deal.                     
          II.  Petitioner’s 1995 Through 1997 Advances to Cap Corp. and               
          the December 2, 1996, Debt Conversion Transaction                           
          A.  Cap Corp. and Its Business                                              
               CMA Capital Corp. (Cap Corp.) was organized in 1989, and               
          until August 1995, Crispin and Koehler were each 50-percent                 
          shareholders.  During August 1995, Crispin reduced his stock                
          ownership from 50 percent to 9 percent, and Koehler                         
          correspondingly increased his stock ownership interest in Cap               
          Corp. from 50 percent to 91 percent.                                        
               Through December 2, 1996, Koehler was in charge of Cap                 
          Corp.’s day-to-day operations, and he would, at least weekly,               
          consult with Crispin about Cap Corp.  After December 2, 1996,               
          Crispin took over Cap Corp.’s day-to-day operations.  Sometime              
          during the middle of 1997, Koehler formally resigned his                    
          positions as a director and a manager of Cap Corp. and                      
          transferred some of his Cap Corp. stock to Crispin, making                  
          Crispin Cap Corp.’s majority shareholder.                                   







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