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X. Equipment Leasing Activities
A. 1991 Rapistan Conveyor System
Starwood Corp. (Starwood), Ministers Life--A Mutual Life
Insurance Co. (Ministers Life), Inter-Market Capital Corp.
(Inter-Market), and General Motors Corp. (GM) are corporations
unaffiliated with any Hubert company. Pursuant to agreements
dated April 30 and June 25, 1991, Starwood leased a 1991 Rapistan
conveyor system to GM. The term of that lease included the 180-
month period beginning November 1, 1991. For each of those 180
months, GM agreed to pay $13,659.83 on the first day of the
month, beginning November 1, 1991.
On October 1, 1991, Starwood purchased the 1991 Rapistan
conveyor system from Ministers Life for $1,327,237.89. All
payments on that purchase were to be made from proceeds from the
lease of the 1991 Rapistan conveyor system. The payment schedule
for the October 1, 1991, promissory note underlying the purchase
anticipated that the monthly payments would be $13,659.83,
starting November 1, 1991.
On October 31, 1991, Printgraphics purchased the 1991
Rapistan conveyor system (subject to the lease) from Starwood for
$1,412,468.68. On the same day, Printgraphics paid Starwood
$75,000 towards that purchase price and financed the rest by
assuming liability for the October 1, 1991, promissory note
between Starwood and Ministers Life. For each of its taxable
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