Estate of Lorraine C. Disbrow, Deceased, Martha D. Johnson, Executrix - Page 18

                                                     -18-                                                       
             9.  Relevant Financial Information                                                                 
                   Funny Hats filed a Form 1065, U.S. Partnership Return of                                     
             Income, for each year from 1994 through 2000.  These returns                                       
             state that the principal business activity of Funny Hats is                                        
             “rental” and that its principal product or service is “real                                        
             estate”.  According to the returns, Funny Hats received rent and                                   
             incurred related expenses, depreciation, and net losses as                                         
             follows:7                                                                                          
             1994      1995    1996      1997     1998      1999     2000                                       
             Gross rents        $11,250   $7,200   $9,600   $10,200   $6,000   $17,000   $4,000                 
             Cash expenses:                                                                                     
             Insurance          -0-      -0-    2,279       100    1,203     1,208    1,208                     
             Legal fees        280      521      649       663      691       747      942                      
             Taxes             -0-    8,940    9,072     9,251    9,501     4,819   10,309                      
             Miscellaneous     -0-       19      -0-        33      -0-       -0-      -0-                      
             Travel            -0-      -0-      -0-       -0-      -0-       -0-    6,397                      
             Business meals    -0-      -0-      -0-       -0-      -0-       -0-      769                      
             Repairs & maint.8,663      401      238     2,265    4,216     5,343      531                      
             Exterminating     -0-       76       81       -0-       81       119      -0-                      
             Bank charges      -0-      -0-      -0-        13       10        96      100                      
             8,943    9,957   12,319    12,235   15,702    12,332   20,256                                      
             Depreciation1      8,364    8,773    8,921     9,003    8,947     9,022    7,975                   
             17,307   18,730   21,240    21,328   24,649    21,354   28,231                                     
             Net loss          6,057   11,530   11,640    11,128   18,649     4,354   24,231                    
                  1Funny Hats claimed depreciation on the entire house and not just on the                     
             portion of the residence that was purportedly rented to decedent.                                  
             Funny Hats also reported for 1997 through 2000 that it had                                         
             received interest income of $529, $177, $73, and $580,                                             
             respectively.  Funny Hats also reported for 2000 that it had                                       
             realized a $51,418 “net section 1231 gain”.                                                        



                   7 Funny Hats also filed a 1993 Form 1065 that did not report                                 
             any income or expense.  The 1993 Form 1065 reported that the                                       
             residence was an asset of Funny Hats and that the principal                                        
             business activity of Funny Hats was “inactive”.                                                    




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