NHUSS Trust, et al. - Page 9

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          furniture business was reported, and improper deductions were               
          claimed for purported distributions to the other two trusts (RJ             
          Pendergraft Trust and In God We Trust) and for alleged business             
          expenses relating to petitioners’ furniture business, all of                
          which offset NHUSS Trust’s reported income, and resulted in no              
          tax liability being reported on NHUSS Trust’s tax returns.                  
               On the 1999 and 2000 trust Federal income tax returns of RJ            
          Pendergraft Trust and In God We Trust, various improper                     
          deductions were claimed for business and personal expenses that             
          offset the trusts’ reported income and that resulted in no tax              
          liability being reported.                                                   
               The following schedules summarize the gross income, taxable            
          income (loss), and tax liability reported on the above joint                
          individual and trust Federal income tax returns for 1999 and                
          2000:                                                                       

          1999                                                                        
                                             Reported                                 
          Date    Type of                    Gross     Taxable      Tax               
          Filed   Return       Taxpayer      Income    Income (Loss)Liability         
          04/10/00  Trust NHUSS Trust        $886,784  ($69)        -0-               
          04/10/00  Trust In God We Trust    149,180   (62)         -0-               
          04/10/00  Trust RJ Pendergraft Trust  244,850(72)         -0-               
          04/09/00  Joint Petitioners        4,800     -0-          -0-               

          2000                                                                        
                                             Reported                                 
          Date    Type of                    Gross     Taxable      Tax               
          Filed   Return       Taxpayer      Income    Income (Loss)Liability         
          04/10/01  Trust NHUSS Trust        $805,884  ($73)        -0-               
          04/10/01  Trust In God We Trust    169,425   (55)         -0-               
          04/10/01  Trust RJ Pendergraft Trust  696,857(60)         -0-               
          04/09/01  Joint Petitioners        4,800     -0-          -0-               






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