Estate of Austin Korby - Page 10

                                       - 10 -                                         
               Austin and Edna’s joint Federal income tax return for 1998             
          was filed by Dennis as personal representative for each estate.             
          The 1998 return was the first return on which it was reported               
          that Austin and Edna were liable for self-employment tax on the             
          payments from KPLP.  The living trust remained KPLP’s general               
          partner after Austin and Edna died.  The living trust held the              
          same property from the spring of 1995 until Austin’s death, and             
          the living trust’s property was worth $143,932 on the date of               
          Austin’s death.  Pursuant to the terms of the living trust                  
          agreement, Austin and Edna’s funeral expenses and Austin’s estate           
          taxes were paid by the living trust.  On September 1, 1999, KPLP            
          issued a check to the living trust for $19,500.  On the same day,           
          the living trust paid estate taxes of $20,068 owed by Austin’s              
          estate.                                                                     
               The living trust agreement provided that upon the death of             
          the first of Austin or Edna to die, the living trust would split            
          into a marital deduction trust and a family trust.  All of the              
          living trust property, less the amount necessary to use the                 
          unified credit amount in effect for the year of death, was to be            
          transferred to the marital deduction trust.  The remaining assets           
          were to be transferred to the family trust.                                 











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