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Home My WebLink About08-01-06 (3) REV-1500 EX (5-00) OFFIClt\L USE ONLY COMMONWEALTH OF PENNSYLVANIA DEPARTMENT OF REVENUE DEPT 280601 HARRISBURG, PA 17128-0601 REV-1500 INHERITANCE TAX RETURN RESIDENT DECEDENT FILE NUMBER ~L COUNTY CODE 05 1119 ----- YEAR NUMBER I- Z W C W () W C DECEDENTS NAME (LAST, FIRST, AND MIDDLE INITIAL) WALTER M. GRACE DATE OF DEATH (MM-DD-YEAR) DATE OF BIRTH (MM-DD-YEAR) 11/1/2005 5/24/1917 (IF APPLICABLE) SURVIVING SPOUSE'S NAME (LAST, FIRST, AND MIDDLE INITIAL) SOCIAL SECURITY NUMBER 184-12--4759 THIS RETURN MUST BE FILED IN DUPLICATE WITH THE REGISTER OF WILLS SOCIAL SECURITY NUMBER Decedent Died Testate (Attach copy of Will) o 2. Supplemental Return o 4a. Future Interest Compromise (date of death after 12-12-82) o o o [X] 3. Remainder Return (date of death pnor to 12-13-82) 5. Federal Estate Tax Return Required W I- 1l::5lJl (J ll::1l:: w Cl.(J :J:OO (J ll::...J Cl.lll Cl. c( 001 04 006 09 Limited Estate Original Return Litigation Proceeds Received 7. Decedent Maintained a Living Trust (Attach copy of Trust) _ 8. Total Number of Safe Deposit Boxes 10. Spousal Poverty Credit (d,te of deo,h befween 12-31-91 ond 1-1-95) 0 11 Election to tax under Sec. 9113(A) (Attach Sch 0) THIS SECTION MUST BE COMPLETED. ALL CORRESPONDENCE AND CONFIDENTIAL TAX INFORMATION SHOULD BE DIRECTED TO: NAME COMPLETE MAILING ADDRESS I- Z W o Z o Cl. <Jl W c:: c:: o (J Peter J. Ressler, Es ~re FIRM NAME (If Applicable) Mette, Evans & Woodside TELEPHONE NUMBER 3401 N. Front Street PO Box 5950 717-232-5000 Harrisburg, PA 17110-()950 (5) 779,000.00 1,988,608.46 60,000.00 344,942.90 377,182.01 26,229.13 OFFIClt\L USE ONLY Real Estate (Schedule A) (1) 2. Stocks and Bonds (Schedule B) (2) 3 Closely Held Corporation, Partnership or Sole-Proprietorship (3) 4. Mortgages & Notes Receivable (Schedule D) 5. Cash, Bank Deposits & Miscellaneous Personal Property (Schedule E) Z 6. Jointly Owned Property (Schedule F) 0 D Separate Billing Requested i= S 7. Inter-Vivos Transfers & Miscellaneous Non-Probate Property ::l (Schedule G or L) l- ii: 8. Total Gross Assets (total Lines 1-7) <( () W 9. Funeral Expenses & Administrative Costs (Schedule H) ~ (4) (6) (7) 57,000.00 C.I (9) (8) 152,264.83 2,349.38 3,632,962.50 10. Debts of Decedent, Mortgage Liabilities, & Liens (Schedule I) (10) (13) 154,614.21 3,478,348.29 100,000.00 11 Total Deductions (total Lines 9 & 10) (11) 12. Net Value of Estate (Line 8 minus Line 11) 13. Charitable and Governmental Bequests/See 9113 Trusts for which an election to tax has not been made (Schedule J) (12) 14. Net Value Subject to Tax (Line 12 minus Line 13) SEE INSTRUCTIONS ON REVERSE SIDE FOR APPLICABLE RATES 15. Amount of Line 14 taxable at the spousal tax 0.00 Z rate, or transfers under Sec. 9116 (a)(1.2) 0 i= 16. Amount of Line 14 taxable at lineal rate 3,378,348.30 c( I- ::l 0.00 Cl. 17. Amount of Line 14 taxable at sibling rate ::ii 0 0.00 (J 18. Amount of Line 14 taxable at collateral rate >< c( T ax Due I- 19. (14) 3,378,348.29 x .0 ~(15) x .0 ~(16) x .12 (17) x .15 (18) (19) 0.00 152,025.67 0.00 0.00 152,025.67 20. ~ CHECK HERE IF YOU ARE REQUESTING A REFUND OF AN OVERPAYMENT > > BE SURE TO ANSWER ALL QUESTIONS ON REVERSE SIDE AND RECHECK MATH < < 3W4645 1 000 Decedent's Complete Address: STREET ADDRESS Swaim Nursinq Home, 210 Biq Spri Cumberland County CI1Y Newville I STATE PA I ~P7241- Tax Payments and Credits: 1. Tax Due (Page 1 Line 19) 2. Credits/Payments A. Spousal Poverty Credit 8. Prior Payments C. Discount (1) 152,025.67 0.00 0.00 0.00 Total Credits (A + 8 + C) (2) 0.00 3. Interest/Penalty if applicable D. Interest E. Penalty 0.00 0.00 Total Interest/Penalty (0 + E) (3) 0.00 4. If Line 2 is greater than Line 1 + Line 3, enter the difference. This is the OVERPAYMENT. Check box on Page 1 Line 20 to request a refund (4) 0.00 5. If Line 1 + Line 3 is greater than Line 2, enter the difference. This is the TAX DUE. (5) 152,025.67 A. Enter the interest on the tax due (5A) 0.00 8. Enter the total of Line 5 + 5A. This is the BALANCE DUE. Make Check to: REGISTER OF (58) 152,025.67 AGENT PLEASE ANSWER THE FOllOWING QUESTIONS BY PLACING AN "X" IN THE APPROPRIATE BLOCKS 1. Did decedent make a transfer and: a. retain the use or income of the property transferred;. . . . . . . . . . . . . . . b. retain the right to designate who shall use the property transferred or its income; . c. retain a reversionary interest; or . . . . . . . . . . . . . . . . . . . . . . . . d. receive the promise for life of either payments, benefits or care? . . . . . . . . . 2. If death occurred after December 12, 1982, did decedent transfer property within one year of death without receiving adequate consideration? . . . . . . . . . . . . . . . . . . . . . . . . . . .. D 3. Did decedent own an "in trust for" or payable upon death bank account or security at his or her death? D 4. Did decedent own an Individual Retirement Account, annuity, or other non-probate property which contains a beneficiary designation? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. D ~ IF THE ANSWER TO ANY OF THE ABOVE QUESTIONS IS YES, YOU MUST COMPLETE SCHEDULE G AND FILE IT AS PART OF THE RETURN. Under penalties of perjury, I declare that I have examined this retum, including accompanying schedules and statements, and to the best of my knowledge Sind belief, it is true, correct and complete Declaration of reparer other than the personal representative is based on all Information of which preparer has any knowledge. Yes No D D D D og og ~ ~ og ~ FOR FILING RETURN Shirley M. Brandt DATE ~-~-o~ 105 Carlisle Road, Newville, PA 17241 SIGNATURE OF PREPARER OTHER THAN REPRE TATlVE Peter J. Ressler ADDRESS 3401 N Front Street PO Box 5950 One Mill Road, #1, Newville, PA 17241 DATE ----- '7,.-.......c; ,- db Harrisburg PA 17110-0950 For dates of death on or after July 1, 1994 and before January 1, 1995, the tax rate imposed on the net value of transfers to or for the use of the surviving spouse is 3% [72 P.S 99916 (a) (1 1) (i)]. For dates of death on or after January 1, 1995, the tax rate imposed on the net value of transfers to or for the use of the surviving spouse is 0% [72 P.S. 99116 (a) (1.1) (ii)] The statute does not exempt a transfer to a surviving spouse from tax. and the statutory requirements for disclosure of assets and filinlJ a tax return are still applicable even if the surviving spouse is the only beneficiary. For dates of death on or after July 1, 2000: The tax rate imposed on the net value of transfers from a deceased child twenty-one years of age or younger at death to or for the use of a natural parent, an adoptive parent, or a stepparent of the child is 0% [72 P.S. 99116(a)(1.2)] The tax rate imposed on the net value of transfers to or for the use of the decedent's lineal beneficiaries is 4.5%, except as noted in 72 f'.S. 99116(1.2) [72 P.S 9 9116(a)(1 )]. The tax rate imposed on the net value of transfers to or for the use of the decedent's siblings is 12% (72 P.S. 9 9116(a)(1.3)]. A siblin91 is defined, under Section 9102, as an individual who has at least one parent in common with the decedent, whether by blood or adoption. 3W4646 1.000 COMMONWEALTH OF PENNSYLVANIA INHERITANCE TAX RETURN RESIDENT DECEDENT SCHEDULE A REAL ESTATE REV-1502 EX + (6-98) ESTATE OF FILE NUMBER M. GRACE WALTER 21 05 1119 All real property owned solely or as a tenant in common must be reported at fair market value. Fair market value is defined as the price at which property would be exchanged between a willing buyer and a willing seller. neither being compelled to buy or sell, both having reasonable kno,^nedge of the relevant facts. Real property which is jointly-owned with right of survivorship must be disclosed on Schedule 1=. ITEM NUMBER 1. DESCRIPTION VALUE AT DATE OF DEATH 1.85 acres of real estate in West Pennsboro Township, Cumberland County, PA, tax parcel #46-20-1758-003A. Value per appraisal of Diversified Appraisal Services dated 5/12/06. No market value determined due to no utility for this real estate. 0.00 2 6.89 acres of real estate in West Pennsboro Township, Cumberland County, PA, tax parcel #46-07-0481-041. Value per appraisal of Diversified Appraisal Services dated 5/12/06. 542,000.00 3 76.41 acres of real estate in West Pennsboro Township, Cumberland County, PA, tax parcel #46-07-0481-046. Value per appraisal of Diversified Appraisal Services dated 5/12/06. 237,000.00 TOTAL (Also enter on line 1, Recapitulation) $ 779,000.00 3W4695 1000 (If more space is needed, insert additional sheets of the same size) REV-1503 EX + (6-98) COMMONWEALTH OF PENNSYLVANIA INHERITANCE TAX RETURN RESIDENT DECEDENT SCHEDULE B STOCKS & BONDS ESTATE OF FILE NUMBER M. GRACE WALTER 21 05 1119 All property jointly-owned with right of survivorship must be disclosed on Schedule F. ITEM NUMBER DESCRIPTION VALUE AT DATE OF DEATH 1.66 Shares American International Group, Inc. CUSIP: 026874107 4,288.68 2 11,613.238 Shares Growth Fund of America - A (Cambridge Investment Account #5CR-072520) 340,267.87 3 10 Shares Imperial Corp. (Cambridge Investment Account #5CR-072520) Worthless - no valuation after 5/15/1990. CUSIP: 452722101 No Value 0.00 4 31,643.998 Shares Income Fund of America - A (Cambridge Investment Account #5CR-072520) 573,389.24 5 2,115 Shares M&T Bank Corp. CUSIP: 55261F104 225,998.33 6 13,243.444 Shares New Perspective Fund - A (Cambridge Investment Account #5CR-072520) 383,265.27 7 15,227.692 Shares Washington Mutual Investors Fund - A (Cambridge Investment Account #5CR-072520) 461,399.07 TOTAL (Also enter on line 2, Recapitulation) $ 1,988,608.46 3W46961.000 (If more space is needed, insert additional sheets of the same size) REV-1504 EX + (6-98) COMMONWEALTH OF PENNSYLVANIA INHERITANCE TAX RETURN RE ID NT ENT ESTATE OF SCHEDULE C CLOSELY-HELD CORPORATION, PARTNERSHIP OR SOLE-PROPRIETORSHIP FILE NUMBER M. GRACE WALTER 21051119 Schedule C-' or C-2 (including all supporting information) must be attached for each closely-held corporation/partnership interest of the decedent, other than a sole-proprietorship. See instructions for the supporting information to be submitted for sole-proprietorships. ITEM NUMBER DESCRIPTION VALUE AT DATE OF DEATH 1. Susquehanna Valley Partners - see attached valuation from Ronald L. Felty, General Partner. 60,000.00 3W4697 1000 TOTAL (Also enter on line 3, Recapitulation) (If more space IS needed, Insert additional sheets of the same size) $ 60,000.00 REV-1506 EX + (9-00) COMMONWEALTH OF PENNSYLVANIA INHERITANCE TAX RETURN RESIDENT DECEDENT SCHEDULE C-2 PARTNERSHIP INFORMATION REPORT ESTATE OF FILE NUMBER M. GRACE WALTER 21 05 1119 1. Name of Partnership Susquehanna Valley Partners Address PO Box 151 Date Business Commenced 6/2/1993 Business Reporting Year 7/24/2006 State PA Zip Code 17022 City 12/31 2. Federal Employer I.D. Number 23-2713531 3. Type of Business Ren tal Product/Service Park & Townhouse 4. Decedent was a 0 General IXJ Limited partner. If decedent was a limited partner, provide initial investment $ 0.00 5. I PARTNER NAME PERCENT OF PERCENT OF BALANCE OF I INCOME OWNERSHIP CAPITAL ACCOUNT A. M. Grace Walter 7.9200 7.9200 (4,521.00) B. C. D. 6. Value of the decedent's interest $ 7. Was the Partnership indebted to the decedent? If yes, provide amount of indebtedness $ 60.000.00 . . . . . . . . . . . 0 Yes [XI No 0.00 8. Was there life insurance payable to the partnership upon the death of the decedent? . 0 Yes ~ No If yes, Cash Surrender Value $ Owner of the policy o . 00 Net proceeds payable $ 0.00 9. Did the decedent sell or transfer an interest in this partnership within one year prior to death or within Ilwo years if the date of death was prior to 12-31-82? o Yes [XI No If yes, 0 Transfer 0 Sale Percentage transferred/sold_ 0.0000 Transferee or Purchaser Attach a separate sheet for additional transfers and/or sales. Consideration $ o . (~ Date 10. Was there a written partnership agreement in effect at the time of the decedent's death? If yes, provide a copy of the agreement. [XJ Yes o No 11. Was the decedent's partnership interest sold? If yes, provide a copy of the agreement of sale, etc. . . . . . . 0 Yes [:&J No 12. Was the partnership dissolved or liquidated after the decedent's death? . . . . . . . . . . . . . . . 0 Yes ~ No If yes, provide a breakdown of distributions received by the estate, including dates and amounts received. 13. Was the decedent related to any of the partners? . . . . . . . . . . . . . . If yes, explain 14. Did the partnership have an interest in other corporations or partnerships? . . . . . . . . . . . . . . 0 Yes ~ No If yes, report the necessary information on a separate sheet, including a Schedule C-1 or C-2 for each interest DYes o No THE FOLLOWING INFORMATION MUST BE SUBMITTED WITH THIS SCIHEDULE A. Detailed calculations used in the valuation of the decedent's partnership interest. B. Complete copies of financial statements or Federal Partnership Income Tax returns (Form 1065) for the year of death and 4 preceding years. C. If the partnership owned real estate, submit a list showing the complete address/es and estimated fair market value/s. If real estate appraisals have been secured, attach copies. D. Any other information relating to the valuation of the decedent's partnership interest. 4W4699 1.000 REV-1507 EX + (6-98) COMMONWEALTH OF PENNSYLVANIA INHERITANCE TAX RETURN RESIDENT DECEDENT ESTATE OF M. GRACE WALTER SCHEDULE D MORTGAGES & NOTES RECEIVABLE FILE NUMBER 21 05 1119 All property jointly-owned with right of survivorship must be disclosed on Schedule F. ITEM NUMBER DESCRIPTION VALUE AT DATE OF DEATH 1 Bradley Hawk Note Receivable (Estimate) 193,762.73 2 Kurt A. & Brooke E. Finkenbinder Mortgage (Estimate) 151,180.17 TOTAL (Also enter on line 4, Recapitulation) $ 344,942.90 3W46AC 1.000 (If more space is needed, insert additional sheets of same size) REV-1506 EX + (6-96) COMMONWEALTH OF PENNSYLVANIA INHERITANCE TAX RETURN RESIDENT DECEDENT SCHEDULE E CASH, BANK DEPOSITS, & MISC. PERSONAL PROPERTY ESTATE OF M. GRACE WALTER FILE NUMBER 21 05 1119 Include the proceeds 01 litigation and the date the proceeds were received by the estate. All property jointly-owned with the right 01 survivorship must be disclosed on Schedule F. ITEM NUMBER DESCRIPTION VALUE AT DATE OF DEATH 1 1978 Skyline Mobile Home 2,500.00 2 1998 Buick Park Avenue 4,315.00 3 2004 PA Income Tax Refund Interest accrued to 11/1/2005 550.00 54.20 4 2005 Federal Income Tax Refund 2,777.00 5 Adams County National Bank Checking Account #187054 (Titled as John F. Walter Estate. Decedent is the beneficiary of this account.) 78,408.40 6 Adams County National Bank Checking Account #224898 Interest accrued to 11/1/2005 116,863.92 1. 60 7 Cash 50.00 8 Credit Card Refund 39.00 9 Harleysville Insurance - cancellation refund 683.00 10 Household furnishings and personal items 10,000.00 11 Indian River National Bank Checking Account #163279501 1,758.83 12 Nextel Refund 6.60 13 Presbyterian Homes Refund 156,407.46 14 Rick Miller October Rent Payment 300.00 15 Social Security Payment for October, 2005 2,467.00 3W46AD 1.000 TOTAL (Also enter on line 5, Recapitulation) $ (II more space is needed, insert additional sheets olthe same size) 377,182.01 REV-1509 EX + (6-98) COMMONWEALTH OF PENNSYLVANIA INHERITANCE TAX RETURN RESIDENT DECEDENT ESTATE OF M. GRACE WALTER SCHEDULE F JOINTLY-OWNED PROPERTY FILE NUMBER 21 0!5 1119 If an asset was made joint within one year of the decedent's date of death, it must be reported on Schedule G. SURVIVING JOINTTENANT(S) NAME ADDRESS RELATlONSHIP TO DECEDENT A. Brandt, Shirley M One Mill Road, Apt. #1, Newville, PA 17241 Daughter B. Walter, John D 105 Carlisle Road, Newville, PA 17241 Son c. JOINTLY -OWNED PROPERTY: lETTER DATE DESCRIPTlON OF PROPERTY %OF DATE OF DEATH ITEM FOR JOINT MADE INCLUDE NAME OF FINfl.NCIAlINSTITUTION AND BANK ACCOUNT DATE OF DEATH DECO'S VALUE OF N...MBER OR SIMILAR IDENTIFYING NUMBER ATTACH DEED FOR NUMBER TENANT JOINT JOINTL Y-HELD REAL ESTATE VALUE OF ASSET INTEREST DECEDENTS INTEREST 1. A. 1 B 4/30/2002 Adams County National Bank Checking Account #3224871 32,189.87 50.0000 16,094.94 Interest accrued to 11/1/2005 0.44 50.0000 0.22 2 BA 12/30/1899 30,401.9 Shares Cash Management Trust of America - A (American Funds) 30,401. 90 33.3300 10,133.97 TOTAL (Also enter on line 6 Recapitulation) $ 26,229.13 3W46AE 1.000 (If more space is needed, insert additional sheets of the same size) REV-1510 EX + (6-98) SCHEDULE G INTER-VIVOS TRANSFERS & MISC. NON-PROBATE PROPERTY COMMONWEALTH OF PENNSYLVANIA INHERITANCE TAX RETURN RESIDENT DECEDENT ESTATE OF M. GRACE WALTER FILE NUMBER 21 05 1119 This schedule must be completed and filed if the answer to any of questions 1 through 4 on the reverse side of the F~EV-1500 COVER SHEET is yes. DESCRIPTION OF PROPERTY ITEM Ir-..lCLLDE H-E NAME OF TI-E TRANSFEREE, THEIR RELATIONSHIP TO DECEDENT AND DATE OF DEATH % OF DECO'S EXCLUSION T IIXABLE NUMBER Tl-E DATE OF TRANSFER. ATTACHACOPY OF THE DEED FOR REAL ESTATE VALUE OF ASSET INTEREST (IF APPLICABLE) VALUE 1. Brian Walter, Grandson Cash Gift dated 10/4/05 10,000.00 100.0000 3,000.00 7,000.00 2 Brooke Finkenbinder, Granddaughter Cash Gift dated 10/4/05 10,000.00 100.0000 3,000.00 7,000.00 3 Dana Brandt, Son-in-law Cash Gift dated 10/4/05 10,000.00 100.0000 3,000.00 7,000.00 4 Deborah Karsnitz, Granddaughter Cash Gift dated 10/4/05 10,000.00 100.0000 3,000.00 7,000.00 5 Heidi A. Walter, Daughter-in-law Cash Gift dated 10/4/05 10,000.00 100.0000 3,000.00 7,000.00 6 John D. Walter, Son Cash Gift dated 10/4/05 10,000.00 100.0000 3,000.00 7,000.00 7 Lori Wilson, Granddaughter Cash Gift dated 10/4/05 11,000.00 100.0000 3,000.00 8,000.00 8 Shirley Brandt, Daughter Cash Gift dated 10/4/05 10,000.00 100.0000 3,000.00 7,000.00 TOTAL (Also enter on line 7, Recapitulation) $ 57,000.00 (II more space is needed, insert additional sheets olthe same size) 3W46AF 1.000 REV-1511 EX + (12-99) COMMONWEALTH OF PENNSYLVANIA INHERITANCE TAX RETURN RESIDENT DECEDENT SCHEDULE H FUNERAL EXPENSES & ADMINISTRATIVE COSTS ESTATE OF M. GRACE WALTER FILE NUMBER 21 0!5 1119 Debts of decedent must be reported on Schedule I. ITEM NUMBER DESCRIPTION AMOUNT A. FUNERAL EXPENSES: 1. Ewing Brothers Funeral Home 4,277.00 2 Organist for Funeral 150.00 Total from continuation schedules 500.00 B. 1. ADMINISTRATIVE COSTS: Personal Representative's Commissions Name of Personal Representative(s) Social Security Number(s) I EIN Number of Personal Representative(s) Street Address City State Zip Year(s) Commission Paid: 2. Attorney Fees 54,200.00 3. Family Exemption: (If decedent's address is not the same as claimant's, attach explanation) Claimant Street Address City State Zip Relationship of Claimant to Decedent 4. Probate Fees 1,010.00 5. Accountant's Fees 740.00 6. Tax Return Preparer's Fees 7. 1 Adams County National Bank 12.95 2 Cumberland Law Journal 75.00 3 Deborah W. Piper, Tax Collector 2,712.12 Total from continuation schedules 88,587.76 3W46AG 1.000 TOTAL (Also enter on line 9, Recapitulation) (If more space is needed, insert additional sheets of the same size) $ 152,264.83 Estate of: M. GRACE WALTER Item No. 3 4 184-12-4759 Schedule H Part 1 (Page 2) Description Amount Reverend Mikesell 200.00 Wesleyan Church - donation for funeral 300.00 Total (Carry forward to main schedule) 500.00 Estate of: M. GRACE WALTER 184-12-4759 Schedule H Part 7 (Page 2) 4 Diversified Appraisal Services 1,450.00 5 Formprest Cleaners 13.49 6 Groff's Septic 120.00 7 Hoover's Plumbing - Mobile Home 441.00 8 Kuhn Communication 6.00 9 Mette, Evans & Woodside Additional costs to remediate environmental issues regarding Schedule A, Item 2. Property is presently under PA Dept. of Environmental Protection order to conduct inderminate length of well monitoring and testing in order to remove petroleum accumulated in ground water on the property. To date taxpayer has paid in excess of $50,000 for such testing and reporting by outside consultants to DEP. Such consultants are not in a position to determine how long in the future such testing requirements will take. 85,000.00 10 Newville Water & Sewer 122.92 11 PA Department of Revenue Estimated State income tax 555.00 12 The Sentinel 129.35 13 US Treasury 750.00 Total (Carry forward to main schedule) 88,587.76 REV-1512 EX + (12-03) COMMONWEALTH OF PENNSYLVANIA INHERITANCE TAX RETURN RESIDENT DECEDENT ESTATE OF M. GRACE WALTER SCHEDULE I DEBTS OF DECEDENT, MORTGAGE LIABILITIES, & LIENS FILE NUMBER 21 O~) 1119 Report debts incurred by the decedent prior to death which remained unpaid as of the date of death, including unreimbursed medical expenses. ITEM NUMBER 1. DESCRIPTION VALUE AT DATE OF DEATH Checks written prior to death but not cleared until after death 1,276.38 2 PA Department of Revenue PA income tax due 1,073.00 3W46AH 2.000 TOTAL (Also enter on line 10, Recapitulation) $ (If more space is needed, insert additional sheets of the same size) 2 349.38 REV-1513 EX+ (9-00) SCHEDULE J BENEFICIARIES COMMONWEALTH OF PENNSYLVANIA INHERITANCE TAX RETURN RESIDENT DECEDENT ESTATE OF M GRACE WALTER FILE NUMBER 21 05 1119 NUMBER NAME AND ADDRESS OF PERSON(S) RECEIVING PROPERTY I TAXABLE DISTRI BUTI ONS [include outright spousal distributions, and transfers under Sec. 9116 (a) (1.2)] RELATIONSHIP TO DECEDENT Do Not List Trustee~s) AMOUNT OR SHARE OF ESTATE 1 Dana Brandt Dana Brandt, Son-in-law Cash Gift dated 10/4/05 Inventory Value: 7,000.00 Son-in-law 7,000.00 2 Shirley M. Brandt One Mill Road, Apt. #1 Newville, PA 17241 Shirley Brandt, Daughter Cash Gift dated 10/4/05 Inventory Value: 7,000.00 50% of Residue: 1,160,674.15 Daughter 1,167,674.15 ENTER DOLLAR AMOUNTS FOR DISTRIBUTIONS SHOWN ABOVE ON LINES 15 THROUGH 18, AS APPROPf~IA TE, ON REV-1500 COVER SHEET II NON-TAXABLE DISTRIBUTIONS: A SPOUSAL DISTRIBUTIONS UNDER SECTION 9113 FOR WHICH AN ELECTION TO TAX IS NOT BEING MADE B. CHARITABLE AND GOVERNMENTAL DISTRIBUTIONS 1 The Evangelical Christian Church n/k/a Wesleyan Church of the Cross, 100,000.00 3W46AI 1.000 TOTAL OF PART 11- ENTER TOTAL NON-TAXABLE DISTRIBUTIONS ON LINE 13 OF REV-1500 COVER SHEET (If more space is needed, insert additional sheets of the same size) $ 100.000.00 Estate of: M. GRACE WALTER 184-12-4759 Schedule J Part 1 (Page 2) Item No. Description Relation Amount 3 Brooke Finkenbinder Brooke Finkenbinder, Granddaughter Cash Gift dated 10/4/05 Inventory Value: 7,000.00 Granddaughter 7,000.00 4 John D. Walter Trust General Bequests: 500,000.00 Son 500,000.00 5 Deborah Karsnitz Deborah Karsnitz, Granddaughter Cash Gift dated 10/4/05 Inventory Value: 7,000.00 Granddaughter 7,000.00 6 Shirley M. Brandt Trust General Bequests: 500,000.00 Daughter 500,000.00 7 Brian Walter Brian Walter, Grandson Cash Gift dated 10/4/05 Inventory Value: 7,000.00 Grandson 7,000.00 8 Heidi Walter Heidi A. Walter, Daughter-in-law Cash Gift dated 10/4/05 Inventory Value: 7,000.00 Daughter-in-law 7,000.00 9 John D. Walter 105 Carlisle Road Newville, PA 17241 John D. Walter, Son Cash Gift dated 10/4/05 Inventory Value: 7,000.00 50% of Residue: 1,160,674.15 Son 1,167,674.15 10 Lori Wilson Lori Wilson, Granddaughter Cash Gift dated 10/4/05 Inventory Value: 8,000.00 Granddaughter 8,000.00 l~tgr Jrill an~ (TIcJ.atament Uf M. GRACE WALTER I, M. GRACE WALTER, of Newville, Cumberland County, Pennsylvania, declare this to be my last Will, hereby revoking all prior wills and codicils. FIllS..I: The expenses of my last illness and funeral shall be paid from my estate. SECOND: If I survive my husband, JOHN F. WALTER, I give the sum of ONE HUNDRED THOUSAND DOLLARS ($100,000.00) to THE EVANGELICAL CHRISTIAN CHURCH, "B" Street, Carlisle, penn\rlvania. THIRD: I hereby give and bequeath, absolutely and in fee simple, to my spouse, John F. WALTER, all my household furniture and furnishings, books, pictures, jewelry, silverware, automobiles, wearing apparel and all other articles of household or personal use or adornment, provided that if my spouse dies before the thirtieth (30th) day following the day of my death, this gift shall lapse or be divested and I make said bequest to my issue, per stirpes, living at the time of my death, to be divided among them as they shall agree. If they cannot agree for any reason, my Executor shall make the decision and its decision shall be final. My Executor shall represent any minor child in any division of such property and shall deliver to the person standing in the place of a parent to such minor, without bond, such portion Page 1 A~~8, ({ !___ of the minor's share as my Executor, after considering the minor's wishes, deems appropriate and shall sell the balance and pay the proceeds to my Trustees to be retained for the minor under Item SEVENTH hereof. fOURTH: The gift to my spouse in this Item is intended to give my estate the marital deduction effective under the Internal Revenue Code to reduce Federal estate tax. Any provisions in this Will which conflict with or fail of this intention shall bt so reconciled or amplified as to accomplish this objective. I If my spouse, JOHN F. WALTER, survives me, I direct that my Trustees, hereinafter named, hold, IN TRUST, an amount free of all taxes equal to the maximum marital deduction allowable to my estate for Federal estate tax purposes, reduced by an amount, if any, needed to increase my taxable estate to the largest amount that after allowing for the unified credit and any other credits available to my estate, will result in no Federal estate tax, and pay the net income therefrom not less frequently than quarterly to my spouse for life. My spouse shall have power to appoint all or any part or parts of the principal of this Trust to himself or a class composed of the issue of myself and my spouse. This power shall be exercisable by him alone and in all events by specific reference thereto in his Will, or by delivery at any time or times during his lifetime of a written direction to my Trustees who shall thereupon make payment as he directs. My Trustee shall pay to his personal representatives from any unappointed principal the difference between all taxes, interest and penalties which they must pay by reason of his death and those which would be payable by them if such unappointed Page 2 It'/ /{j. (L principal were not taxable in his estate and shall add the balance of such unappointed principal to my residuary Trust. FIFTH: I give and devise the residue of my estate, real and personal. to my Trustee hereinafter named, IN TRUST, as follows: A. The net income therefrom shall be paid to my spouse, JOHN F. WALTER, for life. B. Upon the death of the survivor of myself and my held. IN TRUST, and distributed as follows: spouse, the sum of ONE MILLION DOLLARS ($1,000,000.00) shall be ~# (1) The principal shall be further divided into two equal shares of FIVE HUNDRED THOUSAND DOLLARS ($500,000.00) each, and one share shall be held, IN TRUST, for my each of my children, JOHN D. WALTER and SHIRLEY M. BRANDT. Thereafter: (a) The net income from each child's share shall be paid to that child for life. (b) Upon the death of each of my children who survive the survivor of my said spouse and myself, the share of principal from which he or she is eligible to receive income shall be paid to his or her surviving issue, per stirpes, or in default of such issue, shall be paid to my remaining child and the then living issue of apy deceased child, per stirpes. to be held in trust for my remaining child as part of the share from which he or she receives income and to be paid over to the issue of deceased children. Page 3 )1/ ~)j i(__ (c) If no issue of my children survive the survivor of my said spouse and myself, the remaining undistributed principal and accumulated income shall be divided into two equal shares and one share shall be paid to my heirs who would be entitled thereto under the Intestate Laws of Pennsylvania in effect at the death of the survivor of myself and my spouse; and the other share shall be paid to my spouse's heirs who would be entitled thereto under the Intestate Laws of Pennsylvania in effect at the death of the survivor of myself and my spouse as if my s~use had then died Intestate. C. Upon the death of the survivor of myself and my spouse, I hereby give and bequeath all the rest, residue and remainder of my estate, other than that amount set aside under subparagraph B. hereof, equally to my children, JOHN D. WALTER and SHIRLEY M. BRANDT. In the event either of said children should predecease the survivor of my said spouse and myself, his or her share shall be paid to his or her issue, per stirpes, or, in default of such issue, shall be paid to my remaining child or the then living issue, per stirpes, of a deceased child, as the case may be. SIXTH: Trustee may use principal of the trust under Item FOURTH hereof (Marital Deduction Trust) only for the benefit of my spouse. With the foregoing exception my Trustee may use principal from the trust under Item FIFTH hereof (Residue Trust) for the benefit of my spouse and issue, as that Trustee deems necessary: (a) To meet the expense of any accident, illness or other emergency befalling any of them; Page 4 ~'L-LL~___ . (b) For maintenance, support and education (including college and graduate school); (c) To pay funeral expenses, including the cost of a grave marker and perpetual care of the grave. . Any principal used for the benefit of my issue shall be charged as an advancement from his or her family's share of the trust. Further, any invasion on behalf of any issue cannot exceed the amount that would be allocated to his or her family's share of such trust. Notwithstanding the foregoing, the power to consume, invade or appropriate property for the benefit of my spouse and issue shall be limited by ascertainable standard relating to health, education, support or maintenance within the meaning of subparagraph (a) of Section 2041(b)(1) of the Internal Revenue Code of 1954 or any similar provision which may be in effect at the time of my death so that such power will not constitute a general power of appointment. SEVENTH: I appoint my Trustee as Guardian to hold for minors all property payable by law t.o a guardian appointed by my Will and use the same for the mi.nor's maintenance and education, either directly or by payment to any person selected to disburse it, whose receipt shall be a complete acquittance therefor. All unexpended income and principal shall be paid to the minor at majority. For purposes of this Will, majority shall be construed to be when the individual attains the age of twenty-one (21) years. Page 5 )1/ AI. if EIGHTH: No provision of this Will is intended to exercise any power of appointment, including any power of appointment granted to me by my spouse's estate planning or other documents. NINTH: All taxes, interest and penalties thereon payable by reason of my death with respect to property comprising my gross estate, whether or not passing under this will, shall be paid from the principal of my residuary estate, provided however, that funds of my Trust created herein may be used to pay taxes, interest and penalties attributed to such trust assets. TENTH: No interest of any beneficiary under this Will or any codicil hereto shall be subject to anticipation or voluntary or involuntary alienation, and the personal receipt of such beneficiary shall be the sufficient and only discharge of my Executor and Trustee unless otherwise provided herein. ELEVENTH: In addition to powers given them by law, my Executor and Trustee and their successors and any guardian acting hereunder shall have the following discretionary powers applicable to all real and personal property held by them, effective without court order and until actual distribution: (a) To retain all property received by them including the stock of any corporate fiduciary acting hereunder, provided such property remains productive; Page 6 -ill' , " ( . /",Y J /-t' (b) To invest in all forms of property without restriction to investments authorized to fiduciaries, so long as such investments are productive; (c) To join in any incorporation, partnership, recapitalization, merger, reorganization or voting trust plan; to delegate authority with respect thereto; to deposit investments under agreements and pay assessments; and generally to exercise all rights of investors; (d) To compromise controversies; (e) To exchange or sell for cash, property or credit, publicly or privately, or to lease, even for a term exceeding five (5) years or the duration of the trusts hereunder, without liability on the purchasers or lessees to see to application of the consideration, and to give options for these purposes without obligation to repudiate them in favor of a higher offer; (f) With respect to my residuary trust under Item FIFTH hereof, to allocate items of receipt or disbursement between income and principal as they deem equitable regardless of the character given such items by law; (g) To apply income or principal to which any beneficiary is entitled directly for his or her maintenance and support should they deem such beneficiary incapable of receiving the same by reason of age, illness or any infirmity or incapacity, or to pay the same to such person as they select to disburse it, whose receipt shall be a complete acquittance therefor, without the intervention of any guardian; Page 7 _:?/~, /-:~. {.{/ (h) To borrow money, including the right to borrow from any corporate fiduciary acting hereunder, and mortgage or pledge as security; (i) To hold investments in the name of a nominee; (j) To distribute in cash or kind or partly in each at valuations fixed by them; (k) To assume continuance of the status of any beneficiary with reference to marriage, divorce, illness, incapacity or other change in the absence of information deemed reliable without liability for disbursements made on such assumption; (1) To elect to value my gross estate for Federal estate tax purposes as of the date of my death or as of the alternate valuation date as allowed for such purposes, and to claim as income tax deductions expenses that would otherwise qualify as estate tax deductions and other elections allowable under law; (m) Except to the extent necessary in order that the trust under Item FOURTH hereof qualify for the marital deduction allowable under the Internal Revenue Code, it shall not be necessary to segregate investments as belonging to a particular trust or share therein and all interests may be held in undivided form in a single fund from which proportionate distributions are made based on current reappraisals; (n) To merge any similar trust established by my spouse where the terms of the same are identical; Page 8 >~/~ /,iI ! I ~~~~ (0) In the event that I am the beneficiary of a qualified terminal interest trust and the same is taxable in my estate, I direct that my Executor shall seek reimbursement from said trust for all taxes due by my estate because of the inclusion of such trust in my estate, said computation of taxes due to be computed by taking taxes owed by my estate and such property included therein as compared to the taxes my estate would owe in the event said property were not taxable in my estate; and (p) To undertake any and all acts deemed necessary and proper by it for the proper and advantageous management of any trust and the settlement of my estate. TWELFTH: No fiduciary who is a beneficiary of my residuary trust created in Item FIFTH hereof shall participate in the exercise of any discretionary power to use the principal thereof for the benefit of any person or to apportion or allocate items of charge or credit between principal and income of such trust. THIRTEENTH: Any person, other than my spouse, who shall have died within thirty (30) days of my death, shall be deemed to have predeceased me. If my spouse and I die simultaneously, or under such circumstances that the order of our deaths cannot be established by proof, my spouse shall be deemed to have predeceased me. Any person (other than myself) who shall have died at the same time as any then recipient of income or in a common disaster with such beneficiary, or under such circumstances that it is difficult or impossible to determine who died first, shall be deemed to have predeceased such beneficiary. Page 9 {/i . ,/J l/ FOURTEENTH: I appoint my spouse, JOHN F. WALTER, and my children, JOHN D. WALTER and SHIRLEY M. BRANDT, as Co-Executors of, and as Trustees under this my Will. In the event my said spouse cannot act or continue to act as Executor and/or Trustee for any reason, my said children may continue to act alone in his place. No fiduciary acting hereunder shall be 1$' required to post bond or enter security in any jurisdiction. WHEREOF, I have hereunto )\ ~ ,,;t;;-., ,J day Of~~Jl-,a..'^L' . and the preceding nine (9) pages, and I have IN WITNESS seal this ,:Jlc .lFd set my hand and , 19 q(( to this also placed my initials on each preceding page for better identification and greater security. ")/ I 'i ,/~/ / {'t. . ~ 1 /]..../; .-(A:....- l,t) (~l{/~ ~ M. GRACE WALTER (SEAL) SIGNED, SEALED, PUBLISHED and DECLARED by the above-named Testatrix, M. GRACE WALTER, as and for her Last Will and Testament, in the presence of us, who at her request, in her presence and in the presence of each other, have hereunto subscribed our names as witnesses: f}, '\' A I A:r-n !,c~A_A--LL,. . I ., Residing at];,"" (:/.",1/0)" t/~!.!... ) , /, ,J , ,7'U-I,tL./l."1 /i -I' ((( ll{1J-rjr~--1 ~'" J I~I ,/ '''-( I f-- J.t/'7! / //~tA0...VV- Re sid i ng at :; ,J' h,,-.{A~/ /,>1' /,' I oJ >l-<.U)"~'('/: [I ACKNOWLEDGMENT COMMON'WEALTH OF PENNSYLVANIA COUNTY OF (/) (, ,~4-/;,.j '!-l- ~"~r v-,-,." : SS. I, M. GRACE WALTER, Testatrix, whose name is signed to the attached or foregoing instrument, having been duly qualified according to law, do hereby acknowledge that I signed and executed the instrument as my Last Will and Testament; that I signed it willingly; and that I signed it as my free and voluntary act for the purposes therein expressed. -vr 'I ! ~ rJ~4-. / ;.. / / ~ L--(J.<._e.- (-<.;' a _Lte~ j , M. GRACE WALTER (SEAL) Sworn to and subscribed before, me this d- G day f:,I .-{:-- I Zi/ of ~...'jf~{i:.~,"--t)..(-,'-., , 19~. "" ;"'" ,0 ' \ I~: /7 ,- /' I < (,/' '" \ / -' -"""-< -.;( /. . ,J? oj _ --\>., / ,~(,:~"v"-. ,,.' . ..,.- - (-....r .'Lw- " v,..... '..// N otary P~lic My Commission Expires: (SEAL) Notarial Seal Linda J. Olsen, Notary Public Susquehanna Twp.. Dauphin County l-My Commission Expires Sept. 8, 2000 Member. Pennsylvania Association of Notaries AFFIDAVIT COMMONWEALTH OF PENNSYLVANIA : SS. COUNTY OF DAUPHIN We, Peter J. Ressler , and John F. Walter the Witnesses whose names are signed to the attached or foregoing instrument, being duly qualified according to law, do depose and say that we were present and saw Testatrix, M. GRACE WALTER, sign and execute the instrument as her Last Will and Testament, that Testatrix signed willingly and that she executed said Will as her free and voluntary act for the purposes therein expressed; that each of us in the hearing and sight of the Testatrix signed the Will as Witnesses; and that to the best of our knowledge the Testatrix was at that time eighteen (18) or more years of age, of sound mind and under no constraint or undue influence. /1 !/ 1 /1 j...;. / l",.\___t......~{ .... .. v Witness /\ f,. iCfL<L4..J.j_A..--/ f 1 /' ,I J' err ,fr.J1-{ '/i>>v~~C-,-?...... Witnes's Sworn to and subscribed before me this ~-:IL day of ,;f~j).::{i:;~(J;'..:.,,- , 191' L. . ! - 1/ /'y~i /" {,...:.I~ (SEAL) Notarial Seal . l'nda J Olsen Notary Public " ." hin County 3usquellanna Twp.,. Daup 2000 '}" Commission ExpIres Sept. 8, "-"'-.. .. p^nnsylvania I\ssociation of Notaries '\ll,t;~nDer. 1j My Commission Expires: Diversified Appraisal Services Real Estate Appraisers and Consultants 35 East High Street Carlisle, PA 17013-3052 (717) 249-2758 FAX (717) 258-4701 May 25, 2006 Mr. Peter 1. Ressler Mette, Evans & Woodside 3401 North Front Street P.O. Box 5950 Harrisburg, PA 17110-0950 Dear Mr. Ressler: In accordance with your request, I have inspected and analyzed the 1.85 acre tract ofland in West Pennsboro Township owned by the estate ofM. Grace Walter. Although this tract is listed in the Cumberland County Assessment records as containing 1.85 acres, after meeting with the assessor for West Pennsboro Township, it appears that the actual remaining size of this tract is considerably less than 1.85 acres. Additionally, my discussion with the West Pennsboro Township Zoning Officer resulted in my belief that this tract ofland has no utility. This determination is based upon the fact that the subject tract has a maximum depth of 56.52 feet and the required front yard building setback is forty feet as well as a rear yard building setback of thirty feet. Since no building or even a billboard is permitted to be erected upon this site, due to the setback requirements, it is my considered opinion that the tract has no market value. Should you have any questions relative to this matter, please don't hesitate to give me a call. Very truly yours, ~~ Certified General Appraiser GA-000014-L LEF:sc RESTRICTED USE APPRAISAL REPORT 1 MILL ROAD NEWVILLE , PENNSYLVANIA PREPARED FOR THE ESTATE OF M. GRACE WALTER BY LARRY E. FOOTE DIVERSIFIED APPRAISAL SERVICES 35 EAST HIGH STREET, SUITE 101 CARLISLE, PENNSYLVANIA 17013-3052 (717) 249-2758 COpy TABLE OF CONTENTS PAGE NO. Table of Contents........................... .......... ................................................................... 2 Letter of Transmittal................................................................................................... 3 Summary of Important Facts and Conclusions........................................................... 4 Appraisal Certificate................................................................................................... 5 Intended Use of the Appraisal.................................................................................... 6 Location Analysis....................................................................................................... 7 Zoning........................................................................................................................ . 9 Ownership History.................................................................................................... 11 Estimated Marketing Time....................................................................................... 11 Economic Trends...................................................................................................... 11 Site Description........................................................................................................ 12 Improvements........................................................................................................... 13 Taxes and Assessment.............................................................................................. 15 Highest and Best Use................................................................................................ 16 Cost Approach.......................................................................................................... 19 Sales Comparison Approach..................................................................................... 22 Income Approach...................................................................................................... 32 Reconciliation and Final Value Estimate................................................................. 33 Underlying Assumptions and Limiting Conditions.................................................. 34 Certificate of AppraisaL............................................................................................ 37 Privacy Notice ................... ................ ....................................................................... 39 APPENDIX Qualifications of the Appraiser Photographs Location Map 2 Diversified Appraisal Services Real Estate Appraisers and Consultants 35 East High Street Carlisle. PA 17013-3052 (717) 249-2758 FAX (717) 258-4701 May 12, 2006 TO: The estate ofM. Grace Walter FM: Larry E. Foote RE: Restricted Use Appraisal Report 1 Mill Road Newville, Pennsylvania At your request, I have appraised the captioned property. The restricted use ap- praisal report of a limited appraisal, which follows this letter, is submitted in support of my opinion of Market Value ofthe Fee Simple Interest in the property., as of November 1,2005. I hereby certify that, to the best of my knowledge and belief, the data, facts, and opinions set forth therein, are accurate, subject to the Statement of Assumptions and Lim- iting Conditions that is also made a part of the report, and that the indicated Market Value of the subject property, as of November 1,2005 is: FIVE HUNDRED FORTY-TWO THOUSAND DOLLARS $542,000 This restricted use appraisal has been made using the Departur1e Provision in ac- cordance with the guidelines set forth by the Appraisal Standards Board and is in con- formity with the standards of professional practice of the National Association of Real- tors Appraisal Section. I appreciate your having considered me for this assignment and trust that you find the report entirely satisfactory. Respectfully submitted, cK'~~ Larry E. Foote Certified General Appraiser GA-000014-L 3 SUMMARY OF IMPORTANT FACTS AND CONCL,USIONS LOCATION: 1 Mill Road Newville, Pennsylvania TAX PARCEL NUMBER: 46-07-0481-041 OWNERSHIP: The estate ofM. Grace Walter. LAND SIZE: Approximately 6.89 acres. ZONING: Agriculture District. FLOOD HAZARD DATA: The subject site is not located in a FEW\. identified flood hazard zone, according to map #421590..0010-A. PROPERTY RIGHTS: Fee simple interest. SCOPE OF ASSIGNMENT: The scope of the assignment included an analysis of the subject's area, an inspection of the subject property, an es- timation of the property's highest and best use, considera- tion of all three approaches to value, and the application of those relevant to the valuation of the subject. IMPROVEMENTS: None on site. OBJECTIVE: To estimate the market value of the subj1ect property as un- encumbered. USE OF THE APPRAISAL: Estate settlement. EFFECTIVE DATE: November 1,2005. HIGHEST AND BEST USE: Continued use as a commercial vehicle repair facility, business office and apartment. COST APPROACH: N.A. SALES APPROACH: $542,000 INCOME APPROACH: N.A. VALUE CONCLUSION: $542,000 4 APPRAISAL CERTIFICATE I hereby certify that upon application for valuation by: THE ESTATE OF M. GRACE WALTER the undersigned personally inspected the following described property: All that certain piece or parcel of land situate in West Pennsboro Township, Cumberland County, Pennsylvania, containing approximately 6.89 acn~s and further iden- tified as Cumberland County Tax Parcel 46-07-0481-041. This is a portion ofa larger tract ofland that was acquired on deed reference 14-Y-139. Therefore, there is no avail- able written legal description of this 6.89 acre parcel. To the best of my knowledge and belief the statements containc~d in this report are true and correct, and that neither the employment to make this restricted appraisal report nor the compensation is contingent upon the value reported, and that in my opinion the Market Value as of November 1, 2005 is: FIVE HUNDRED FORTY-TWO THOUSAND DOLLARS $542,000 The property was appraised as a whole, subject to the contingent and limiting conditions outlined herein. c;(~ Larry E. Foote Certified General Appraiser GA-000014-L 5 INTENDED USE OF THE APPRAISAL The intended use of this restricted use appraisal report of a limited appraisal is to estimate the Market Value of the subject property as of November 1,2005. Market Value is defined as the most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a speci- fied date and the passing of title from seller to buyer under conditions whereby: a. Buyer and seller are typically motivated. b. Both parties are well informed or well advised, and each acting in what he considers his own best interest. c. A reasonable time is allowed for exposure in the open market. d. Payment is made in terms of cash in u.s. dollars or in tenns of fi- nancial arrangements comparable thereto. e. The price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale. Source: Office of the Comptroller of the Currency, 12 CFI S34.42(f). 6 LOCATION ANALYSIS The subject property is located in the south central part of PelIDsylvania in Cum- berland County. Cumberland County has pronounced boundaries. The Susquehanna River forms the eastern boundary shared with Dauphin County and thle state capitol, Har- risburg. The Yellow Breeches Creek forms the southeastern boundary with York County. The boundary then extends to the southwest following the Paney and South Mountains. That line also constitutes the southern boundary with Adams County. The southwestern boundary with Franklin County is traced by Laughlin Run, Middle Spring Creek, Gum Run, and Maines Run while the ridge line of Blue Mountain forms the northern boundary with Perry County. Based upon statistics from the Commonwealth of Pennsylvania Department of Labor and Industry Bureau of Research and Statistics, total civilian labor force in the Harrisburg-Carlisle-Lebanon MSA as of January, 2003 was 352,200, up 500 from Janu- ary, 2002, which was 351,700. The unemployment rate for Cumberland County as of January, 2003 was 3.3 percent, up .2 percent from January, 2002 which was 3.1 percent. These figures of unemployment are lower than 5.4 percent for the commonwealth of Pennsylvania. Over the year service producing industries are down 38,6000 jobs and goods producing industries are down 37,600 jobs. Major east-west transportation links serving the general area are U.S. Route 22 and 322, Interstate Route 78, and Interstate Route 76. Major nearby north-south arteries include Interstate Route 81, Interstate Route 83, and U.S. Routes 11 and 15. Rail service is provided by Amtrak on ConRail's line. The rail terminal is located in downtown Har- 7 risburg. Air transportation includes four airports with Harrisburg International Airport serving the major carriers of US. Air, American, and Pennsylvania Commuter Air Lines. General aviation is also served by Capital City Airport and the Carlisle: Business Airport. Higher education is offered through the Harrisburg Area Community College, the University Center at Harrisburg, Pennsylvania State University at Harrisburg, Dickinson College and Dickinson Law School. Millersville State University, Shippensburg State University, Susquehanna University, Franklin and Marshall College, and York College, among others, are all within a one hour drive of the general area. Newville is located in the southeast section of central Pennsylvania, approxi- mately thirty miles from Harrisburg, the state capitol. The town itself is presently under- going a considerable degree of renovation and restoration of older properties. Employment opportunities are good, with Commonwealth of Pennsylvania, Her- shey Foods Corporation, Herco, Inc., Bethlehem Steel, Harrisburg Hospital, Pennsylvania Blue Shield, Hershey Medical Center, Carlisle Barracks, PPG Industries, Carlisle Tire and Wheel and Lear Corp. being the major employers in the area. 8 ZONING The subject property is located in an area which is zoned Commercial District. In this district no building or land shall be used, and no building shall be erected which is arranged, intended to be, or designed to be, used for other than one or more of the follow- ing approved uses: A. Churches or similar places of worship. B. Public and private schools for the educational needs of the community when not conducted for gain or profit, and including accessory residential uses. C. Elderly housing and care facilities, assisted or shared living residences, convales- cent homes, accessory apartments, elderly cottages, personal care facilities and group homes. D. Municipal parks, playgrounds and recreation areas including municipal and pri- vate pools, ballfields with accessory structures and utilities, pavilions for public or private uses. E. Public utility facilities and communications buildings and structures. F. Day care centers. G. Amusement enterprises including theaters, bowling alleys, skating rinks, minia- ture golf courses, or similar uses. H. Department, variety stores, and stores for retailing of beverages, drugs, gas, hard- ware, bakery products, clothing, household appliances, furniture, sporting goods, hobbies, toys, and gasoline. 9 I. Personal service establishments including barber and beauty shops, tailors, dry cleaning, self-service laundries. 1. Banks, other financial institutional businesses, and professional offices. K. Manufacturing of pottery and other ceramics products. 1. Printing and newspaper publishing. M. Laboratories N. Hotels and motels. O. Restaurants or food selling establishments. P. Car sales and service. Q. Medical and dental clinics and laboratories. R. Construction and farming equipment, sales, and service. S. Dance or music or art studios. T. Commercial recreation facilities. U. Public libraries and museums. V. Nursery, greenhouses, lawn and garden equipment, supplies and service. W. Accessory buildings and customarily incidental permitted uses. 10 OWNERSHIP HISTORY The subject property is owned by the estate ofM. Grace Walter. The property is a portion of a larger tract that was purchased on May 9, 1950 for a reported consideration of$1.00 and ownership transferred on deed reference 14-Y-139. ESTIMATED MARKETING TIME It is estimated that if the subject property were offered for sale at the indicated Market Value, a reasonable marketing time would be six to twelve months. This estimate is based upon quarterly sales figures published by Central Penn Multi List, Inc. ECONOMIC TRENDS Historically, property values for similar properties have steadily increased, with vacancy rates remaining stable. Financing is readily available to qualified purchasers at reasonable rates and terms. 11 SITE DESCRIPTION The subject site is irregular in shape, consists of a total area of approximately 6.89 acres, and has macadam road frontage along Mill Road. The site: is relatively level throughout and there does not appear to be any drainage problems. According to the Federal Emergency Management Agency map number 421590-001O-A, the site is not located in an area which is prone to flooding. In the absence of core boring, it has been assumed that there are no mineral de- posits of a commercial nature underlying the subject site. However, the occupant of the property has informed me that there has been an ongoing problem of oil pollution in the ground water table below the surface of the site. This condition is considered to have a substantial adverse affect upon the value of the subject site. Access to the site is via Mill Road, and visibility of the site from this roadway is considered to be good. Utilities available at the site include water, sewer, electricity and telephone ser- VIce. There appears to be sufficient capacity in each of these utilities to permit optimum utilization of the site. 12 IMPROVEMENTS The subject property is improved with a two-story detached commercial building, constructed upon a partial basement, containing a total of approximately 18,014 square feet of gross building area above grade. This building is divided into 3,291 square feet of finished office space on the first floor, 13,029 square feet of first floor garage and repair shop space, and 1,694 square feet of apartment space on the second floor. The exterior walls of this building are of a combination of painted concrete block, brick and painted corrugated steel panels. Roofing is of the flat type, covered with corru- gated steel panels and a built-up material. Gutters and downspouts are of painted alumi- num. The exterior passage doors are of steel and access to the shop and repair areas is provided by ten fourteen-foot wide fiberglass overhead garage doors. Windows are of the vinyl-clad thermopane type in the office section. The first floor office suite consists of six rooms and a restroom. The second floor apartment is divided into a living room, kitchen, two bedrooms, laundry room and a full bathroom. The office space is finished with carpet and asphalt tile floor coverings, wood paneled walls and suspended acoustical tile ceilings. The apartment has hardwood floor- ing, vinyl-clad wall panels and suspended acoustical tile block ceilings. The office suite and the apartment are heated by an oil-fired hot water heating system and the office is cooled by a central air conditioning system. The garage and re- pair shop are heated by two oil-fired forced hot air heating systems. Also located on the site is a 784 square foot metal canopy over the fuel pumping station that is located next to the building. Underground fuel storage tanks consist of an 13 8,000 gallon gasoline tank, a 12,000 gallon diesel fuel tank, a 3,000 gallon fuel oil tank and a 3,000 gallon waste oil tank. There is a small macadam parking area adjacent to the office and there is a large stone parking area around the perimeter of the building. All improvements are considered to be in fair to average condition on the interior and on the exterior, with mechanical systems appearing to be adequate and functioning properly. 14 TAXES AND ASSESSMENT The real estate tax assessment, synonymous with assessed value, is the official valuation level of property for advalorem tax purposes. Since the assessment is a dollar amount assigned to taxable property by the assessor for the purposes of taxation, it may not reflect the independent value conclusions found within this report. The following is the assessment and tax liability for the subject property as determined by the County As- sessor's Office: Assessment Land Improvements Total $ 73,520 676,260 $749,780 Mill Rates: Township County School Total .0002135 .0023770 .0123750 .0149655 Tax Liability: Township County School Total $ 160.08 1,782.23 9,278.53 $11,220.83 15 HIGHEST AND BEST USE Highest and Best Use is defined by the Appraisal Terminology and Handbook, published by the Appraisal Institute, as "the most profitable likely use to which a prop- erty can be put". The opinion of such use may be based on the highest and most profit- able continuous use to which the property is adapted and needed, or likely to be in de- mand, in the reasonable near future. However, elements affecting value that depend upon events or a combination of occurrences which, while within the realm of possibility, are not fairly shown to be rea- sonably probable, should be excluded from consideration. Also, if the intended use is dependent on an uncertain act of another person, the intention cannot be considered. The following tests must be passed in determining the highest and best use of the subject property. a. The use must be physically possible. The size, shape, and topography of the site affect possible uses for which it can be developed. b. The use must be legal, i.e., permitted under zoning and other municipal, county, state, or federal regulations. c. The use must be financially feasible, probable, and not speculative. There must be an economic, social, or market demand for the existing or proposed use. All uses that are expected to produce a positive return are regarded as fi- nancially feasible. d. Finally, the highest and best use must be that which produced the highest pos- sible net return for the longest period of time. 16 The highest and best use of the site as vacant may be different from the highest and best use as currently improved. This is most likely to occur with older properties, where physical condition, market changes, and neighborhood changes have been signifi- cant since the period when originally constructed. IDGHEST AND BEST USE AS VACANT: The highest and best use of the property as vacant assumes the site has no existing improvements. This concept is important to the appraisal report as it is carried through to the valuation of the land in the cost approach, if applicable. It assists in the selection of comparable sales of vacant sites to apply to the subject site. Considering the physical characteristics of the site, neighborhood uses, current zoning, location, and financial pa- rameters, it is my opinion that the highest and best use of the subject property, as vacant, would be for construction of a construction or farming equipment sales, and service facil- ity. IDGHEST AND BEST USE AS IMPROVED: The analysis of highest and best use of a property as improved addresses what use should be made of the current improvements. Possible choices include renovation, ex- pansion, demolition, or maintaining its current use with no changes. Considering the physical characteristics of the property, neighborhood uses, current zoning, location, and financial parameters, it is my opinion that the highest and best use of the subject property, as improved, is for continued use as a vehicle and equipment repair center with offices and apartment. 17 THE APPRAISAL PROCESS Three approaches to value are generally included in an appraisal report. These techniques include the cost approach, sales comparison approach, and income approach to value. The cost approach to value is based on the assumption that the reproduction cost of a building plus land value, tends to set the upper limit to value. A key assumption is that a newly constructed building would have advantages over the existing building, therefore an evaluation focuses upon disadvantages or deficiencies (depreciation) of the existing building compared to a new facility. The sales comparison approach to value assumes that under normal conditions, a given number of parties acting intelligently and voluntarily, tend to set a pattern from which value can be estimated. Application of this approach relies on a comparison of the subject with a sufficient number of recent transactions of comparable properties in the market, based on a common unit, such as price per square foot of building area. The income approach concerns itself with present worth of the future potential benefits of a property. The initial estimate involves the net income, which a fully in- formed person is justified in assuming the property will produce during its remaining use- ful life. This estimated net income is then capitalized into a value estimate, based upon the level of risk as compared with that of a similar type and class. At the request of the client and in accordance with the departure provision of the Uniform Standards of Professional Appraisal Practice, only the sales comparison ap- proach to value has been applied to the subject property and is subsequently presented. 18 THE COST APPROACH The cost approach to value is based on the principle of substitution, which pro- poses that an informed buyer will pay no more than the cost of providing a substitute property with similar utility. In estimating the value of the subject property by the cost approach, the following steps must be completed: a. Estimate the value of the site to its highest and best use as though vacant, which we have done. b. Estimate the reproduction or replacement cost of the improvements on the ef- fective date of the appraisal. This includes direct and indirect costs. c. Estimate other costs incurred after construction to bring the: new, vacant build- ing up to market conditions and occupancy levels. d. Estimate entrepreneurial profit, when appropriate, from an analysis of the market. e. Add estimated replacement or reproduction cost, indirect costs, and entrepre- neurial profit, often expressed as a percentage of total direct and indirect costs to arrive at the total replacement or reproduction cost of th{: primary structure. f. Estimate the amount of accrued depreciation in the structure, which is divided into three major categories; physical deterioration, functional obsolescence, and external obsolescence. 19 g. Deduct the estimated depreciation from the total reproduction or replacement cost of the structure to derive an estimate of the structure's depreciated repro- duction or replacement cost. h. Estimate reproduction or replacement costs and depreciation for any acces- sory buildings and site improvements, and then deduct estimated depreciation from the reproduction or replacement costs of these improvements. Site im- provements and minor building improvements are often appraised at their net value, i.e., directly on a depreciated cost basis. 1. Add the depreciated reproduction of replacement costs of the structure, the accessory buildings, and the site improvements to obtain the estimated total depreciated reproduction or replacement cost of all improvements. J. Add the land value to the total depreciated reproduction or replacement cost of all improvements to arrive at the indicated value of the fee simple interest in the property. k. Adjust the indicated fee simple value to reflect the property interest being ap- praised, if necessary, to produce an indicated value for the interest in the sub- ject property. Comparison is the essence of the cost approach to value, similar to the sales com- parison and income approaches. Construction costs, plus land values, are compared to the values of existing improved properties. The four principles used for the sale compari- son approach (substitution, supply and demand, balance, and externalities), are also ap- plicable to the cost approach. 20 So the cost approach to value can be derived and equitably compared with the other approaches to value, adjustments for accrued depreciation from all causes are de- ducted from the reproduction cost, including: a. Physical Deterioration: Physical wearing out of property. b. Functional Obsolescence: Lack of desirability in teIms of layout, style and design as compared to that of a new property, serving the same func- tion. c. External Obsolescence: Loss of value from causes outside the property it- self. The cost approach to value is most applicable for new properties, where the com- ponents of physical deterioration and functional and external obsolescence are small. The Marshal Valuation Service is used in this approach with actual costs for the subject property. The Marshall Valuation Service is a complete, dependable appraisal guide for de- veloping replacement costs, depreciated values, and insurable value:s of buildings and other improvements. Modifiers are applied to make the cost applicable to any size build- ing in any locality. Known costs for locally constructed properties are also analyzed and compared with derived cost estimates. The land value is based on comparable land sales using the same techniques as applied in the sales comparison approach. Due to the age of the subject improvements, the cost approach to value is consid- ered to be inappropriate and has, therefore, not been included in the development of this restricted use appraisal report. 21 THE SALES COMPARISON APPROACH The sales comparison approach is a process of comparing market data, that is, the prices paid for similar properties, prices asked by owners, offers made by prospective purchasers willing to buy, and rents and leases. In applying the sales comparison approach, various appraisal principles are ap- plied, ensuring that all relevant issues have been included in the analysis. The principles of primary importance are supply and demand, balance, substitution, and externalities. Additionally, a fundamental premise of the sales comparison approach is the concept, that from analysis of sales of reasonably similar properties, an appraiser has a factual basis upon which to estimate the value of the subject. Proper application of the sales compari- son approach requires that: a. Only market transactions be weighed, and the date of each transaction be con- firmed to the greatest extent possible. b. The degree of comparability of each sale to the subject be considered. c. The value conclusion be consistent with the analysis ofth~: sales data. A definition of market value is: "The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: a. Buyer and seller are typically motivated. 22 b. Both parties are well informed or well advised, and each acting in what he considers his own best interest. c. A reasonable time is allowed for exposure in the open market. d. Payment is made in terms of cash in U.S. dollars or in terms of financial ar- rangements comparable thereto. e. The price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone asso- ciated with the sale. The degree of comparability that exists between a sale and the subject is often a function of the volume of sales activity in a market. For any class of real estate, if sales are infrequent, the market area must be expanded in scope of time and or geography to whatever extent is necessary to accumulate sufficient data on which to base a judgment. To judge the degree of comparability between a sale and the subject, several guidelines can be applied. a. The sale should be in the same market as the subject. To the extent that a market is a meeting place for buyers and sellers of real estate of a given type, the boundaries of the market are set by the participants in merchandising and absorbing competitive properties. The boundaries of a market area are conse- quently economic in character, and not purely physical or geographic. b. Physical characteristics of the sale and subject should be as similar as possible in terms of size and amenities customarily found within the applicable class of real estate. c. Real estate price trends over time must be taken into consideration. 23 d. The functional adequacy of the sale property and the subject should be com- petitive in terms of the ability of each to support similar functions. In arriving at this conclusion of the value of the subject property, your appraiser made a survey of properties that have been sold recently or are now offered for sale within the general area. Sales, terms of sale, price, and exterior, as well as interior appointments, were verified by a personal examination and/or interview with the sales brokers. As it was impossible to find an identical property to that of the subject, since no two properties are ever identical, it was necessary to make adjustments on each compara- ble sale and offering for sale as related to the subject property. Consideration was given and adjustments were made on each comparable sale, of- fering for sale as to time of sale, size, location, age, and utility, as well as all other factors that might affect value. A resume of some of the sales and offerings for sale considered by your appraiser are listed on the following pages: 24 SALE NO. 1: Location: 99 West Main Street Plainfield, Pennsylvania Tax Parcel Number: 46-18-1394-008 Date of Sale: Deed Reference: Type: Building Size: Lot Size: Parking: Grantor: Grantee: Sale Price: Unit Price: Data Source: October 3,2005. Deed Book 271, Page 1218. One-story detached concrete block commercial sales and service building. 6,497 square feet. .77 acre. On-site parking lot. Marlin 1. and Janet A. Swarner. Thomas and Teresa 1. Wilkins. $375,000 $57.72 per square foot. Exterior inspection of the property, and Cumberland County Courthouse records. 25 SALE NO.2: Location: 345 Carlisle Road Newville, Pennsylvania Tax Parcel Number: 46-07-0481-007A Date of Sale: Deed Reference: Type: Building Size: Lot Size: Parking: Grantor: Grantee: Sale Price: Unit Price: Data Source: April 26, 2005. Deed Book 268, Page 2901. One-story detached metal commercial sales and storage building. 9,000 square feet. 4.88 acres. On-site parking lot. Bradley E. and Walter J. Fickes. Drillers Service, Inc. $294,840 $32.76 per square foot. Exterior inspection of the property, and Cumberland County Courthouse records. 26 SALE NO. 3: Location: 1513 Commerce Drive Carlisle, Pennsylvania Tax Parcel Number: 40-09-0527-026 Date of Sale: Deed Reference: Type: Building Size: Lot Size: Parking: Grantor: Grantee: Sale Price: Unit Price: Data Source: March 4,2005. Deed Book 267, Page 4143. One-story detached masonry repair garage. 5,800 square feet. 3.00 acres. On-site parking lot. M&S Enterprises, Inc. SSAC Enterprises, LLC. $475,000 $81.90 per square foot. Exterior inspection of the property, and Cumberland County Courthouse records. 27 Your appraiser, in addition to the sales listed, also considered several additional sales in arriving at his final opinion of value. After making all of the necessary adjust- ments, as explained in the opening paragraphs under this approach to value, it is your ap- praiser's considered opinion that the Market Value of the subject property by the Sales Comparison Approach is best estimated at $542,000. 28 SALES ADJUSTMENTS The appraiser has analyzed comparable sales and has devdoped dollar adjust- ments, reflecting market reaction to those items of significant variation between the sub. ject and comparable properties. If a significant item in the comparable property is supe- rior to, or more favorable than the subject property, a minus (-) adjustment is made, thus reducing the indicated value of the subject; if a significant item in the: comparable is infe- rior to, or less favorable than the subject property, a plus (+) adjustment is made, thus in- creasing the indicated value of the subject. SALE # 1 SALE #2 SALE #3 Sale Price 375,000 294,840 475,000 Time + 14,700 +23,800 Location -95,000 Construction Quality -37,500 -14,700 -23,800 Building Size +345,500 +270,400 +366,400 Building Condition -37,500 -29,500 -95,000 Apartment +20,000 +20,000 +20,000 Land Size + 183,600 +60,300 + 116,700 Contaminated On Site -93,800 -73,700 -118,800 Net Adjustment +380,300 +247500 + 194,300 Indicated Value: 755,300 542,340 669,300 29 EXPLANATION OF ADJUSTMENTS COMPARABLE SALE NO.1: A 10 percent negative adjustment was made for the subject's inferior quality of construction. A $30 per square foot positive adjustment was made for the subject's larger building size. A 10 percent negative adjustment was made for the subject's inferior condition. A $20,000 positive adjustment was made for the apartment on the second floor of the subject building. A $30,000 per acre positive ad- justment was made for the subject's larger land size. A 25 percent negative adjustment was made for the presence of fuel contamination in the water table on the subject site. COMPARABLE SALE NO.2: A 5 percent positive adjustment was made for the lapse in time between the sale date of the comparable sale and the effective date of this ap- praisal. A 5 percent negative adjustment was made for the subject's inferior quality of construction. A $30 per square foot positive adjustment was made for the subject's larger building size. A 10 percent negative adjustment was made for the subject's inferior con- dition. A $20,000 positive adjustment was made for the apartment on the second floor of the subject building. A $30,000 per acre positive adjustment was made for the subject's larger land size. A 25 percent negative adjustment was made for the presence of fuel contamination in the water table on the subject site. COMPARABLE SALE NO.3: A 5 percent positive adjustment was made for the lapse in time between the sale date of the comparable sale and the effective date of this ap- praisal. A 20 percent negative adjustment was made for the subject's inferior location. A 5 percent negative adjustment was made for the subject's inferior quality of construction. 30 A $30 per square foot positive adjustment was made for the subject's larger building size. A 20 percent negative adjustment was made for the subject's inferior condition. A $20,000 positive adjustment was made for the apartment on the second floor of the sub- ject building. A $30,000 per acre positive adjustment was made for the subject's larger land size. A 25 percent negative adjustment was made for the presence of fuel contami- nation in the water table on the subject site. 31 THE INCOME APPROACH The income approach is a method of converting income streams into present worth. Using this approach, the net operating income should be sufficient to cover total mortgage payments and offer a return on equity investment. The net operating income is capitalized to obtain an estimate of value by income approach. At the request of the cli- ent, and in accordance with the requirements of the Departure Provision of the Uniform Standards of Professional Appraisal Practice, the cost approach has not been included in the development of this restricted use appraisal report. 32 RECONCILIATION AND FINAL VALUE ESTIMATE Reconciliation is the analysis of alternative conclusions to arrive at a final value estimate. Reconciliation is required because different value indications result from the use of multiple approaches to value and within the application of a single approach. The final value estimate is not derived simply by applying technical and quantita- tive procedures; rather, it involves the exercise of judgment. The value conclusion reached must be consistent with market thinking. The parts of this appraisal report are the following approaches to value your ap- praiser used: Value Indicated by Cost Approach Value Indicated by Sales Comparison Approach Value Indicated by Income Approach N.A. $542,000 N.A. These approaches are representative of the market value of the property. I have carefully examined each step in each method, and I believe the conclusions accurately reflect the attitude of typical purchasers of this type property in this neighborhood. It is my belief that this reexamination has confirmed the original conclusions. As a result of this restricted appraisal and analysis, it is this appraiser's considered judgment and opinion that the Market Value of the subject property, as of November 1, 2005 is: FIVE HUNDRED FORTY-TWO THOUSAND DOLLARS $542,000 33 UNDERLYING ASSUMPTIONS AND LIMITn~G CONDITIONS SUBJECT TO THIS APPRAISAL 1. I assume no responsibility for matters legal in nature, nor do I render any opinion as to the title, which is assumed to be marketable. The property is appraised as though under responsible ownership. 2. The legal description used herein is correct. 3. I have made no survey of the subject property, and the boundaries are taken from records believed to be reliable. 4. I assume that there are no hidden or unapparent conditions of the property, subsoil or structures which would render it more or less valuable. I assume no responsi- bility for such conditions or for engineering which might be required to discover such factors. 5. The information, estimates, and opinions furnished to me and contained in this re- port were obtained from sources considered to be reliable and believed to be true and correct. However, no responsibility for accuracy can be assumed by me. 6. This appraisal report is to be used in its entirety and only for the purpose for which it was rendered. 7. Neither all nor any part of the contents of this appraisal report, (especially any conclusions as to value, the identity of the appraiser or the finm with which he is connected) shall be reproduced, published, or disseminated to the public through advertising media, public relations media, sales media, or any other public means 34 of communication, without the prior written consent and approval of the ap- praiser. 8. Unless otherwise stated in this report, the existence of hazardous material, includ- ing without limitation asbestos, polychlorinated biphenyls, petroleum leakage, or agricultural chemicals, which mayor may not be present on the property, was not observed by the appraiser. The appraiser has no knowledg{~ of the existence of such materials on or in the property. The appraiser, however, is not qualified to detect such substances. The presence of substances such as asbestos, urea- formaldehyde foam insulation, or other potentially hazardous materials may affect the value of the property. The value estimate is predicated on the assumption that there is no such material on or in the property that would cause a loss in value. No responsibility is assumed for any such conditions, or for any expertise or engi- neering knowledge required to discover them. The client is urged to retain an ex- pert in this field, if desired. 9. I do not have knowledge or experience required to evaluate whether physical changes have to be made to existing facilities to conform to the Americans With Disabilities Act regulations or whether alterations or new construction meets the requirements. Therefore, the value reported is based upon the assumption that the subject property conforms to the ADA regulations. The client is urged to retain an expert in this field, if desired. to. Acceptance of and/or use of this appraisal report constitutes acceptance of the foregoing assumptions and limiting conditions. 35 11. Adherence to the confidentiality requirement of the Uniform Standards ofProfes- sional Appraisal Practice requires that, prior to making any copies of the appraisal report or having discussions related to this appraisal assignment with anyone other than the client, approval from the client be obtained in writing. Upon re- ceipt of said written authorization, copies of the appraisal report shall be produced or discussions with a third party may be held. Fees for these additional services shall be mutually agreed upon and are payable in advance. 12. This appraisal was prepared for the exclusive us of the client identified in this ap- praisal report. The information and opinions contained in this appraisal set forth the appraiser's best judgment in light of the information available at the time of the preparation of this report. Any use of this appraisal by any other person or en- tity, or any reliance or decisions based on this appraisal are the sole responsibility and at the sole risk of the third party. The appraiser accepts no responsibility for damages suffered by any third party as a result of reliance on or decisions made or actions taken based on this report. 36 CERTIFICATE OF APPRAISAL Your appraiser hereby certifies that: 1. I have no present or contemplated future interest in the subject property. 2. I have no personal interest or bias with respect to the subject matter of this ap- praisal report or the parties involved. My findings are not based on the employ- ment to make the restricted appraisal, a requested minimum valuation, a specific valuation, or the approval of a loan. 3. To the best of my knowledge and belief, the statements of ulct contained in this appraisal report, upon which the analyses, opinions, and conclusions expressed herein are based, are true and correct. 4. This restricted appraisal report sets forth all of the limiting conditions (imposed by the terms of my assignment or by the undersigned) affecting the analyses, opinions, and conclusions contained in this report. 5. This restricted appraisal report has been made in conformity with the Uniform Standards of Professional Appraisal Practice adopted by the Appraisal Standards Board of the Appraisal Foundation, and is subject to the requirements of the Code of Professional Ethics and Standards of Professional Conduct of the Appraisal Section of the National Association of Realtors. 6. No one other than the undersigned prepared the analyses, conclusions, and opin- ions concerning real estate that are set forth in this restricted appraisal report. 7. This restricted appraisal report has been completed in a manm::r that does not mis- lead or confuse the client or the intended users of the report. 37 8. The appraiser has advised the client that the assignment calls for something less than, or different from the work required by the specific guidelines. 9. The client has agreed that the performance of a restricted appraisal would be ap- propriate. cr"~ Larry E. Foote Certified General Appraiser GA-OOOOI4-L 38 PRIVACY NOTICE Pursuant to the Gramm-Leach-Billey Act of 1999, effective July 1,2001, apprais- ers, along with all providers of personal financial services are now required by federal law to inform their clients of the policies of the firm with regard to the privacy of client nonpublic personal information. As professionals, we understand that your privacy is very important to you and are pleased to provide you with this infoffilation. In the course of performing appraisals, we may collect what is known as "nonpub- lie personal information" about you. This information is used to facilitate the services that we provide to you and may include the information provided to us by you directly or received by us from others with your authorization. We do not disclose any nonpublic personal information obtained in the course of our engagement with our clients to nonaffiliated third parties, except as necessary or as required by law. By way of example, a necessary disclosure would he to our independent contractors, and in certain situations, to unrelated third party consultants who need to know that information to assist us in providing appraisal services to you. All of our inde- pendent contractors and any third party consultants we engage are informed that any in- formation they see as part of an appraisal assignment is to be maintained in strict confi- dence within the firm. A disclosure required by law would be a disclosure by us that is ordered by a court of competent jurisdiction with regard to a legal action to which you are a party. We will retain records relating to professional services that Wl~ have provided to you for a reasonable time so that we are better able to assist you with your needs. In or- 39 der to protect your nonpublic personal information from unauthorized access by third par- ties, we maintain physical, electronic and procedural safeguards that comply with our professional standards to insure the security and integrity of your information. 40 LARRY E. FOOTE REAL ESTATE APPRAISER EXPERIENCE: 1979-Present: Chief Appraiser, Diversified Appraisal Services, Carlisle, Pa. Principal Broker, LaRue Development Company, Carlisle, Pa. 1976-1979: Associate Broker, Colonial Realty, Carlisle, Pa. 1972-1976: Realtor Associate, Jack Gaughen Realtor, Carlisle, Pa. Appraisal experience included undeveloped land, farms, building lots, single-family dwellings, mobile home parks, medical centers, nursing homes, motels, apartment buildings and complexes, office buildings, service stations, veterinary clinics, rehabilitation centers, n~tail buildings, day- care centers, warehouses, and manufacturing facilities. EDUCATION: Bachelor of Business Administration, Pennsylvania State University, 1976. Associate Bachelor of Business Administration, Harrisburg Area Community College, 1974. Diploma, Carlisle Senior High School, 1965. Certificate, Pennsylvania Realtors Institute, GRl I, GRl II, GRl III. Certificate, Realtors National Marketing Institute, CI 101, CI 102, CI 103, CI 104, CI105. Standards of Professional Practice, American Institute of Real Estate Appraisers. Real Estate Appraisal Principles, American Institute of Real Estate Appraisers. Residential Valuation, American Institute of Real Estate Appraisers. Appraisal Procedures, Appraisal Institute. Principles of Income Property Appraising, Appraisal Institute. Case Studies in Real Estate Valuation, Appraisal Institute. Report Writing and Valuation Analysis, Appraisal Institute. PROFESSIONAL LICENSES: General Appraiser #GA-000014-L, Commonwealth of Pennsylvania. Real Estate Broker #RB-029729-A, Commonwealth of Pennsylvania. PROFESSIONAL DESIGNATIONS: GRl: Graduate of the Pennsylvania Realtors Institute, awarded by the Pennsyl- vania Association of Realtors. CRS: Certified Residential Specialist, awarded by the Realtors National Market- ing Institute of the National Association of Realtors. CCIM: Certified Commercial Investment Member, awarded by the Realtors National Marketing Institute of the National Association of Realtors. PROFESSIONAL ORGANIZATION AFFILIATIONS: National Association of Realtors Appraisal Section. Carlisle Association of Realtors. Pennsylvania Association of Realtors. National Association of Realtors. Realtors National Marketing Institute. 41 PAST CLIENTS: Borough of Carlisle Keystone Financial Mortgage Cornerstone Federal Credit Union Pennsylvania State Bank Commerce Bank Cumberland-Perry Association for Retarded Citizens Carlisle Suburban Authority Members 15t Federal Credit Union pennsylvania National Bank Evans Financial Corporation Greenawalt & Company, CPA Smith's Transfer Corporation Carlisle Department of Parks and Recreation Executive Relocation Services Carlisle Area School District Messiah Homes, Incorporated ERA Eastern Regional Services Pennsylvania Turnpike Commission Chase Home Mortgage Corporation Defense Activities Federal Credit Union Pennsylvania State Employees Credit Union PNC Mortgage Corporation F &M Trust Company National City Mortgage Corporation Washington Mutual Home Loans, Inc. Prudential Relocation Services Lender's Choice Market Intelligence, Incorporated United Telephone Employees Federal Credit Union Cumberland County Commissioners Allstate Enterprises Mortgage Corporation Dickinson College PPG Industries, Incorporated Gettysburg College Redevelopment Authority of Cumberland County Record Data Appraisal Services, Incorporated First United Federal Savings Association Fulton Bank United States Marshall Service GMAC Mortgage Corporation Orrstown Bank Letterkenny Federal Credit Union BancPlus Mortgage Corporation Coldwell Banker Relocation Services, Incorporated Central Pennsylvania Savings Bank Mellon Bank Provident Home Mortgage Corporation Various law fIrms and individuals 42 PHOTOGRAPHS OF THE SUBJECT IMPROVE1\1ENTS 43 STREET SCENES AT THE SUBJECT PROPERTY 44 PHOTOGRAPH OF COMPARABLE SALE NUMBER 1 45 PHOTOGRAPH OF COMPARABLE SALE NUMBER 2 46 PHOTOGRAPH OF COMPARABLE SALE NUMlBER 3 47 . .... .. .. .. . .. . .. . .. WAGGONU .... ...... . . .. . .. . [ SUBJECT PROPERTY LocATION MAP APPRAISAL REPORT 76.4-ACRE TRACT OF LAND NE~LE, PENNSYLVANIA PREPARED FOR THE ESTATE OF M. GRACE WALTER BY LARRY E. FOOTE DIVERSIFIED APPRAISAL SERVICES 35 EAST HIGH STREET, SUITE 101 CARLISLE, PENNSYL V AN1A 17013-3052 (717) 249-2758 COpy SUMMARY OF IMPORTANT FACTS AND CONCLUSIONS LOCATION: Mill Road Newville, Pennsylvania TAX PARCEL NUMBER: 46-07-0481-046 DESCRIPTION: A76.4 -acre tract of vacant land. PROPERTY RIGHTS: Fee simple interest. OWNERSHIP HISTORY: The subject property is owned by the estate ofM. Grace Walter. The property is a portion of a larger tract that was purchased on May 9, 1950 for a reported consideration of $1.00 and ownership transferred on deed reference 14- Y- 139. SCOPE OF THE ASSIGNMENT: The scope of the assignment included an analysis of the subject's area, an inspection of the subject property, an estimation of the property's highest and best use, consideration of all three approaches to value, and the application of those relevant to the valuation of the subj ect. OBJECTIVE: To estimate the market value ofth~: subject property as unencumbered. EFFECTIVE DATE: As of November 1,2005. HIGHEST AND BEST USE: Use for agricultural purposes. COST APPROACH: N.A SALES APPROACH: $237,000 INCOME APPROACH: N.A FINAL VALUE CONCLUSION: $237,000 2 APPRAISAL CERTIFICATION I hereby certify that upon application for valuation by: THE ESTATE OF M. GRACE WALTER the undersigned personally inspected the following described property: All that certain piece or parcel of land situate in West Pennsboro Township, Cumberland County, Pennsylvania, containing approximately 76.4 acres: and further identified as Cumberland County Tax Parcel 46-07-0481-046. This is a portion of a larger tract of land that was acquired on deed reference 14-Y-139. Therefore, there is no available written legal description of this 76.4 acre parcel. To the best of my knowledge and belief the statements contained in this report are true and correct, and that neither the employment to make this appraisal nor the compensation is contingent upon the value reported, and that in my opinion the Market Value as of November 1, 2005 is: TWO HUNDRED THIRTY-SEVEN THOUSAND DOLLARS $237,000 The property was appraised as a whole, subject to the contingent and limiting conditions outlined herein. !~5~~ Certified General Appraiser GA-000014-L 3 PURPOSE OF THE APPRAISAL The purpose of this appraisal is to estimate the Market Value of the subject property as of November 1,2005. Market Value, as defined by the courts, is the most probable price: estimated in terms of money which a property will bring if exposed for sale in the open market, allowing a reasonable time finding a purchaser who buys with knowledge of all the uses to which it is adapted and for which it is capable of being used. Frequently, it is referred to as the price at which a willing seller would sell and a willing buyer would buy, neither being under abnormal pressure. HIGHEST AND BEST USE Highest and Best Use is defined by the Appraisal Terminology and Handbook, published by the Appraisal Institute, as "the most profitable likely use to which a property can be put". The opinion of such use may be based on the highest and most profitable continuous use to which the property is adapted and needed, or likely to be in demand, in the reasonable near future. However, elements affecting value that depend upon events or a combination of occurrences which, while within the realm of possibility, are not fairly shown to be reasonably probable, should be excluded from consideration. Also, if the intended use is dependent on an uncertain act of another person, the intention cannot be considered. Based on the above definition and after seeing the site, neighborhood, and area, it is my opinion that use of the subject for agricultural purposes is its Highest and Best Use. 4 SITE DATA ADDRESS: Mill Road TOWNSHIP: West Pennsboro COUNTY: Cumberland STATE: Pennsylvania LOT SIZE: Approximately 76.4 acres. SEWERS: None on site. WATER: None on site. ELECTRICITY: Public utility at the site. LANDSCAPING: None ZONING: Agriculture District. DETRIMENTAL INFLUENCES None. Pride of ownership is evident throughout the neighborhood. DESCRIPTION OF THE SITE The subject site consists of a vacant tract ofland containing approximately 76.4 acres of gross area. This tract of land is irregular in shape and contains macadam road frontage along Mill Road. The topography of the site is best described as rolling. There does not appear to be any drainage problems, and according to the Federal Emergency Management Agency map number 421590-0010-A, the site is not located in an area which is prone to floodling. In the absence of core boring, it has been assumed that there are: no mineral deposits of a commercial nature underlying the subject site. For the same reason, it is assumed that there are no unusual sub-soil conditions that would adversely affect the subjeet site. Access to the site is via Mill Road, and visibility of the site from this roadway is considered to be good. 5 THE APPRAISAL PROCESS Three approaches to value are generally included in an appraisal report. These techniques include the cost approach, sales comparison approach, and income approach to value. The cost approach to value is based on the assumption that the reproduction cost of a building plus land value, tends to set the upper limit to value. A key assumption is that a newly constructed building would have advantages over the existing building, therefore an evaluation focuses upon disadvantages or deficiencies (depreciation) of the existing building compared to a new facility. The sales comparison approach to value assumes that under normal conditions, a given number of parties acting intelligently and voluntarily, tend to set a pattern from which value can be estimated. Application of this approach relies on a comparison of the subject with a sufficient number of recent transactions of comparable properties in the market, based on a common unit, such as price per square foot of building area or price per acre. The income approach concerns itself with present worth of the fillture potential benefits of a property. The initial estimate involves the net income, which a fully informed person is justified in assuming the property will produce during its remaining useful life. This estimated net income is then capitalized into a value estimate, based upon the level of risk as compared with that of a similar type and class. Since the subject property consists of a vacant tract of land or existing improvements have insignificant value, in accordance with the departure provision of the Uniform Standards of Professional Appraisal Practice, only the sales comparison approach to value has been applied to the subject property and is subsequently presented. 6 SALES COMPARISON APPROACH In arriving at this conclusion of the value of the subject property, the appraiser made a survey of properties that have sold in the area of the subject property. Consideration was given and adjustments were made on each comparable sale as to time of sale, size, location, as well as all other factors that might affect value. A resume of some of the sales considered by the appraiser is as follows: SALE NO. 1: Location: Parcel No.: Date of Sale: Deed Ref.: Sale Price: Size: Unit Price: Grantor: Grantee: SALE NO.2: Location: Parcel No.: Date of Sale: Deed Ref.: Sale Price: Size: Unit Price: Grantor: Grantee: SALE NO.3: Location: Parcel No.: Date of Sale: Deed Ref.: Sale Price: Size: Unit Price: Grantor: Grantee: Lefever Road, West Pennsboro Township. 46-08-0589-017 August 18, 2005. Deed Book 270, Page 2432. $252,500 61.39 acres. $4,113 per acre. David P. and Sally A. Wagner. Ronald E. and Susan M. Lebo. Old Mill Road, Lower Frankford Township. 14-05-0419-028 June 4,2004. Deed Book 263, Page 1935. $180,000 60.70 acres. $2,965 per acre. Paul E. Dick. Glenn Herman. Potato Road, Upper Frankford Township. 43-05-0419-015 & 082 March 10, 2004. Deed Book 262, Page 87. $400,000 116.10 acres. $3,445 per acre. Robert J. and Shirley A. Yinger. Larry V. and Mary J. Neidlinger. 7 The appraiser, in addition to the sales listed, also considered several additional sales in arriving at his final opinion of value. On the Sales Comparison Analysis form that follows this page are dollar adjustments reflecting market reaction to those items of significant variation between the subject and comparable properties. If a significant item in the comparable property is superior to, or more favorable than, the subject property, a minus (-) adjustment is made, thus reducing the indicated value of the subject; if a significant item in the comparable is inferior to, or less favorable than, the subject property, a plus (+) adjustment is made, thus increasing the indicated value of the subject. After making all of the necessary adjustments, it is the appraiser's considered opinion that the indicated value of the subject property by the Sales Comparison Approach is $237,000. 8 SALES COMPARISON ADJUSTMENTS The appraiser has analyzed comparable sales and has developed dollar adjustments, reflecting market reaction to those items of significant variation between the subject and comparable properties. If a significant item in the comparable property is superior to, or more favorable than the subject property, a minus (-) adjustment is made, thus reducing the indicated value of the subject; if a significant item in the comparable is inferior to:. or less favorable than the subject property, a plus (+) adjustment is made, thus increasing the indicated value of the subject. Sale Price Price Per Acre Time Public Road Frontage Net Adjustment Indicated Unit Value: SALE # I 252,500 4,113 -411 -411 3,702 76.4 acres x $3,101 = $236,916 Rounded to: $237,000 9 SALE #2 180,000 2,965 +297 -593 -296 2,669 SALE #3 400,000 3,445 +345 -689 -344 3,101 CORRELATION Correlation may be defined as "the bringing together of parts in a proper relationship." The parts of this appraisal report are the following approaches to value your appraiser used: Value Indicated by Cost Approach Value Indicated by Sales Comparison Approach Value Indicated by Income Approach N.A. $237,000 N.A. These approaches are representative of the market value of the subject property. I have carefully reexamined each step in each method, and I believe the conclusions accurately reflect the attitude of typical purchasers of this type property in this neighborhood. It is my belief that this reexamination has confirmed the original conclusions. The Sales Comparison Approach was based on several recent sales of properties similar to that of the subject, all of which are located in the same general an:a. The adjusted sales prices are most consistent under comparison. This approach is the most reliable because it reflects the reactions of typical buyers and sellers in the market. Therefore, as a result of this appraisal and analysis, it is this appraiser's considered judgment and opinion that the Market Value of the subject property, as of November 1,2005, IS: TWO HUNDRED THIRTY-SEVEN THOUSAND DOLLARS $237,000 10 UNDERLYING ASSUMPTIONS AND LIMITING CONDITIONS SUBJECT TO TillS APPRAISAL 1. I assume no responsibility for matters legal in nature, nor do I render any opinion as to the title, which is assumed to be marketable. The property is appraised as though under responsible ownership. 2. The legal description used herein is correct. 3. I have made no survey of the property, and the boundaries are taken from records believed to be reliable. 4. I assume that there are no hidden or unapparent conditions of the property, subsoil or structures which would render it more or less valuable. I assume no responsibility for such conditions or for engineering which might be required to discover such factors. 5. The information, estimates, and opinions furnished to me and contained in this report were obtained from sources considered reliable and believed to be true and correct. However, no responsibility for accuracy can be assumed by me. 6. This report is to be used in its entirety and only for the purpose for which it was rendered. 7. Neither all nor any part of the contents of this report (especially any conclusions as to value, the identity of the appraiser or the firm with which he is connected) shall be reproduced, published, or disseminated to the public through advertising media, public relations media, news media, sales media, or any other public means of communication, without the prior written consent and approval of the appraiser. 8. This appraisal was prepared for the exclusive use of the client identified in this appraisal report. The information and opinions contained in this appraisal set forth the appraiser's best judgment in light of the information available at the time of the preparation of this report. Any use of this appraisal by any other person or entity, or any reliance or decisions based on this appraisal are the sole responsibility and at the sole risk of the third party. The appraiser accepts no responsibility for damages suffered by any third party as a result of reliance on or decisions made or actions taken based on this report. 11 CERTIFICATE OF APPRAISAL Your appraiser hereby certifies that: 1. The statements of fact contained in this report are true and correct. 2. The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and are my personal, impartial, and unbiased professional analyses, opinions, and conclusions. 3. I have no present of prospective interest in the property that is the subject of this report, and no personal interest with respect to the parties involved. 4. I have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment. 5. My engagement in this assignment was not contingent upon developing or reporting predetermined results. 6. My compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal. 7. To the best of my knowledge and belief, the statements of fact contained in this appraisal report, upon which the analyses, opinions, and conclusions expressed herein are based, are true and correct. 8. This appraisal report sets forth all of the limiting conditions (imposed by the terms of my assignment or by the undersigned) affecting the analyses, opinions, and conclusions contained in this report. 9. This appraisal report has been made in conformity with the Uniform Standards of Professional Appraisal Practice adopted by the Appraisal Standards Board of the Appraisal Foundation, and is subject to the requirements of the Code of Professional Ethics and Standards of Professional Conduct of the National Association of Realtors Appraisal Section. 12 10. No one other than the undersigned prepared the analyses, conclusions, and opinions concerning real estate that are set forth in this appraisal report. J(tUH'~~ La~ Foot; ~- Certified General Appraiser GA-000014-L 13 PRIVACY NOTICE Pursuant to the Gramm-Leach-Billey Act of 1999, effective July 1,2001, appraisers, along with all providers of personal financial services are now required by federal law to inform their clients of the policies of the firm with regard to the privacy of client nonpublic personal information. As professionals, we understand that your privacy is very important to you and are pleased to provide you with this information. In the course of performing appraisals, we may collect what is known as "nonpublic personal information" about you. This information is used to facilitate the services that we provide to you and may include the information provided to us by you directly or received by us from others with your authorization. We do not disclose any nonpublic personal information obtained in the course of our engagement with our clients to nonaffiliated third parties, except as necessary or as required by law. By way of example, a necessary disclosure would be to our independent contractors, and in certain situations, to unrelated third party consultants who need to know that information to assist us in providing appraisal services to you. All of our independent contractors and any third party consultants we engage are informed that any information they see as part of an appraisal assignment is to be maintained in strict confidence within the flrm. A disclosure required by law would be a disclosure by us that is ordered by a court of <competent jurisdiction with regard to a legal action to which you are a party. We will retain records relating to professional services that we have provided to you for a reasonable time so that we are better able to assist you with your needs. In order to protect your nonpublic personal information from unauthorized access by third parties, we maintain physical, electronic and procedural safeguards that comply with our protessional standards to insure the security and integrity of your information. 14 LARRY E. FOOTE REAL ESTATE APPRAISER EXPERIENCE: 1979-Present: Chief Appraiser, Diversified Appraisal Services, Carlisle, Pa. Principal Broker, LaRue Development Company, Carlisle, Pa. 1976-1979: Associate Broker, Colonial Realty, Carlisle, Pa. 1972-1976: Realtor Associate, Jack Gaughen Realtor, Carlisle, Pa. Appraisal experience included undeveloped land, farms, building lots, single-family dwellings, mobile home parks, medical centers, nursing homes, motels, apartment buildings and complexes, office buildings, service stations, veterinary clinics, rehabilitation centers, retail buildings, daycare centers, warehouses, and manufacturing facilities. EDUCATION: Bachelor of Business Administration, Pennsylvania State University, 1976. Associate Bachelor of Business Administration, Harrisburg Area Community College, 1974. Diploma, Carlisle Senior High School, 1965. Certificate, Pennsylvania Realtors Institute, GRI I, GRI II, GRI III. Certificate, Realtors National Marketing Institute, CI 101, CI 102, CI 103, CI 104, CI 105. Standards of Professional Practice, American Institute of Real Estate Appraisers. Real Estate Appraisal Principles, American InstitUte of Real Estate Appraisers. Residential Valuation, American Institute of Real Estate Appraisers. Appraisal Procedures, Appraisal Institute. Principles of Income Property Appraising, Appraisal Institute. Case Studies in Real Estate Valuation, Appraisal Institute. Report Writing and Valuation Analysis, Appraisal Institute. PROFESSIONAL LICENSES: General Appraiser #GA-000014-L, Commonwealth of Pennsylvania. Real Estate Broker #RB-029729-A, Commonwealth of Pennsylvania. PROFESSIONAL DESIGNATIONS: GRI: Graduate of the Pennsylvania Realtors Institute, awarded by the Pennsyl- vania Association of Realtors. CRS: Certified Residential Specialist, awarded by the Realtors National Market- ing Institute of the National Association of Realtors. CCIM: Certified Commercial Investment Member, awarded by the Realtors National Marketing Institute of the National Association of Realtors. PROFESSIONAL ORGANIZATION AFFILIATIONS: National Association of Realtors Appraisal Section. Carlisle Association of Realtors. Pennsylvania Association of Realtors. National Association of Realtors. Realtors National Marketing Institute. 15 PAST CLIENTS: Borough of Carlisle Keystone Financial Mortgage Cornerstone Federal Credit Union Pennsylvania State Bank Commerce Bank Cumberland-Perry Association for Retarded Citizens Carlisle Suburban Authority Members I st Federal Credit Union Pennsylvania National Bank Evans Financial Corporation Greenawalt & Company, CPA Smith's Transfer Corporation Carlisle Department of Parks and Recreation Executive Relocation Services Carlisle Area School District Messiah Homes, Incorporated ERA Eastern Regional Services Pennsylvania Turnpike Commission Chase Home Mortgage Corporation Defense Activities Federal Credit Union Pennsylvania State Employees Credit Union PNC Mortgage Corporation F &M Trust Company National City Mortgage Corporation Washington Mutual Home Loans, Inc. Prudential Relocation Services Lender's Choice Market Intelligence, Incorporated United Telephone Employees Federal Credit Union Cumberland County Commissioners Allstate Enterprises Mortgage Corporation Dickinson College PPG Industries, Incorporated Gettysburg College Redevelopment Authority of Cumberland County Record Data Appraisal Services, Incorporated First United Federal Savings Association Fulton Bank United States Marshall Service GMAC Mortgage Corporation Orrstown Bank Letterkenny Federal Credit Union BancPlus Mortgage Corporation Coldwell Banker Relocation Services, Incorporated Central Pennsylvania Savings Bank Mellon Bank Provident Home Mortgage Corporation Various law firms and individuals 16 PHOTOGRAPHS OF THE SUBJECT PROF'ERTY 17 Date of Death: :1/01/2005 Valuation Date: 11/01/2005 Processing Date: 07/25/2006 Shares or Par Security Description 1 ) 66 ~~ERICAN INTL GROUP INC (026874107) COM New York Stock Exchange 11/01/2005 2 ) 2115 M & T BK CO~P (55261F104) COM New York Stock Exchange 11/01/2005 3) 10 :MPERIAL CO~P ~~ER DEL (452722:01) COM New York Stock Exchange 05/15/1990 Last price available on 05/15/:990 Total Value: Total Accrual: Total: $230,287.01 Estate Valuation High/Ask 65.45000 107.60000 0.10938 Page 1 Low/Bid 64.51000 H/L 106.11000 H/L 0.07813 H/L Estate of: M. Grace Walter Account: 13211.: Report Type: Date of Death Nu~ber of Securities: 3 File 10: WALTER Mean and/or Div ana Int Adjustments Accruals 64.980000 106.855000 0.093750 Security Value 4,288.68 225,998.33 N/A $230,287.01 $0.00 This repoct was produced with EstateVal, a product of Estate Valuations & Pricing Systems, Inc. If you have questions, please contact EVP Systems at (818) 313-6300 or www.evpsys.com. (Revision 7.0.4) ... :I: 1ii (') zm m:ll :e:! ... 6~ :II... ?'m ~~ ('):11 0 >> G>Z ("'\ 00> 0;:1 -oj ~~ ~fn C7' >- ZZ 10(') m> N rz m... 0 ~. Ule 0 _Z 0 ~ ~ ~ ~ OJ e) ~ () ~ C~ ~~ ~ C~ ~ "'1 -< pj e :n ^ tt 0 = ,..., c: v:J (') H ~ ~ "'C ...m ~ ill In c < In ~ ~ ru ~ ~ Ir ::j... I:-' ~~ ~ 0> I:-' C .& S! 8 rml o ~ ~~ ~ ff: l~ II I ~ E: !; .... -< :r - o :D N m " V> Gi z ":< c ili ....;Z ~s: ;J> "z V> ~~ '1:" Vi>> ....G1 s:!)! :Xl-< Nov OS 05 02:03p Ral::i I<ellel::i 717 652 3530 p.2 Ray Kelley, CFP* Registere-.d Representative Investment Advisor Representative 120 Ferree Street HalTishurg, PA 171 O\) Phone: (717) 657-4955 Fax: (717) 652-3530 M. GRACE W ALTER ACCOUNT: 5CR- 072520 Values as of 11101/05 FUND SHARES PRICE VALUE Income Fund of America - A 31,643.998 $ 18.12 $ 573,389.24 Growth Find of America ~ A 11,613.238 29.30 340,267.87 New Perspective Fund - A 13,243.444 28.94 383,265.27 Washington Mutual Investors Fund - A 15,227.692 30.30 461,399.07 TOTAL VALUE $ 1,758,321.45 SecUlities offered thrllugh Cambridge Inveslment Re\earch, Inc.,;1 Registered Broker/Dealer, Member NASDJSJPC. Inveslmcnl Advisury S~lVi(;es offered rhlUugh Cambridge Investment Research Advisors, Inc., a Fcd(:rally Regi.tcred Investment Advisor. U.S. Return of Partnership Income For calendar year 2005, or tax year beginning ,2005, and ending , 20 ~ See se arate instructions. OMS No.1 545.0099 Form 1 065 2005 ~~~'::lM:rT\Al'\t nf thl;! Tn;~~~ury Iternal Revenue Service A Principal business activity RENTAL o Employer identification number Use the IRS label. Other- wise, print or type. SUSQUEHANNA VALLEY PARTNERS P.O. BOX 151 ELIZABETHTOWN, PA 17022 PARK B Principal product or service E Dale business starled 6/02/1993 C Business code number F Total assels (see instrs) 531110 $ 725,275. G Check applicable boxes: (1) Initial return (2) Final return (3) Name change (4) Address change (5) Amended return H Check accounting method: (1) Cash (2) X Accrual (3) Other (specify). . . .. ~ _. _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ I Number of Schedules K-1. Attach one for each person who was a partner at any time during the tax year. . . . . . . . . . . . . .. ~ 33 Caution: Include only trade or business income and expenses on lines 7a through 22 below. See the instructions for more information. S E E I N S T R 0 U c E T D I U 0 N C s T I F 0 0 R N 5 L I M I T A T I 0 N 5 Sign Here Paid Preparer's Use Only 1 a Gross receipts or sales. . . . . . . . . . . . . . . . . . . b Less returns and allowances. . . . . . . . . . . . . . lii!.I:I',::.::I.I:1 1a 1b 1 c I N C o M E 2 Cost of goods sold (Schedule A, line 8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 3 Gross profit. Subtract line 2 from line 1 c. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 4 Ordinary income (loss) from other partnerships, estates, and trusts (attach statement) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 5 Net farm profit (loss) (attach Schedule F (Form 1040)).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 6 Net gain (loss) from Form 4797, Part II, line 17 (attach Form 4797)........ .... ........... . ......... 6 7 Other income (loss) (attach statement) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 8 Total income (loss). Combine lines 3 through 7. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 9 Salaries and wages (other than to partners) (less employment credits) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 10 Guaranteed payments to partners. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 10 11 Repairs and maintenance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 11 12 Bad debts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. .................................................... 12 13 Rent......................................................................................... 13 14 Taxes and licenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 14 15 Interest...................................................................................... 15 16a Depreciation (if required, attach Form 4562).......................... W b Less depreciation reported on Schedule A and elsewhere on return. . . .. ~ 16c 17 Depletion (Do n l and gas depletion.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 18 Retirement plans, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 18 19 Employee benefit programs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 19 20 Other deductions (attach statement) . . . . . . . . . . . . . . . . . . . . . . . . 20 21 Total deductions. Add the amounts shown in the far right column for lines 9 through 20. . . . . . . . . . . . .. 21 22 Ordinary business income (loss). Subtract m line 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 22 Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and statements, and to the best of my knowledge and belief, it is true, correct, and complete. Declaration of preparer (other than general partner or limited liability company member) is based on all information of which preparer has any knowledge. ~ ~ Signature of general partner or limited liability company manager Date P reparer's signature EIN ~ Phone no. (71 7) 3 67 - 9 3 96 PTF'A0105L 12/28/05 Form 1065 (2005) No Date 1130106 Check if self- ~ employed. . .. - Firm's name (or yours if self-employed), ~ address, and ZIP code BAA For Privacy Act and Paperwork Reduction Act Notice, see separate instructions. Form 1065 (2005) SUSQUEHANNA VAL _1 PARTNERS 23-2713531 !sijtHUHmbK:ij:!{iij:l Cost of Goods Sold (see the instructions) 1 Inventory at b 2 Purchases les 3 Cost of labor. 4 Additional sec (attach statem 5 Other costs (attach statem 6 Total. Add lin 7 Inventory at e 8 Cost of good 98 Check all methods used for valuing closing inventory: (i) ~ Cost as described in Regulations section 1.471.3 (ii) Lower of cost or market as described in Regulations section 1.471-4 (iii) Other (specify method used and attach explanation). . . . . . . . , . . , .. ~ b Check thiS box If there was a wntedown of 'subnormal' goods as described In Reg-;:;I;rtl;;n~ ;e~tl-;;n-1-:-471 ~2(c)~ ~ ~ ~ ~ ~ ~ ~ ~. - ~ ~ - - c Check thiS box If the LIFO Inventory method was adopted thiS tax year for any goods (If checked, attach Form 970). ., ..... . ~ d Do the rules of section 263A (for property produced or acquired for resale) apply to the partnership? .. ...... . . .. D Yes No e Was there any change In determining quantities, cost, or valualions between opening and clOSing Inventory? . . . .. D Yes No If 'Yes', attach ex lanation.. :is#.fiia:ijli!f1s.:::m:::m Other Information 1 What type of entity is filing this return? Check the applicable box: Yes No a ~ Domestic general partnership b ~ Domestic limited partnership \i:\t?: ,)t/)) c Domestic limited liability company d Domestic limited liability partnership iir:::::::::::j'!: :{(:J:t:! e Foreign partnership f Other. . .. ~ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _._ _ _ _ _ _ _ _ _ _ _ _ :::'::::;:!i:::::::: 'ii!'i:j:j:i:ii!:;iii 2 Are any partners in this partnership also partnerships?, . . . . . . . . . . . . . . . . . . . , . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , X 3 During the partnership's tax year, did the partnership own any interest in another partnership or in any foreign entity that was disregarded as an entity separate from its owner under Regulations sections 301.7701.2 and 301.7701.3? If yes, see instructions for required attachment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , . , ' X 4 Did the partnership file Form 8893, Election of Partnership Level Tax Treatment, or an election statement under section 6231 (a)(l)(B)(ii) for partnership. level tax treatment, that is in effect for this tax year? See Form 8893 for more details. . . . . , X 5 : l~~l~;;~:[:~)~~:;~~~~;i~~~ji:~f~~}~f;~i~~;:~,~~;:~~; ~n,d du, da', Dneludlng "',n,,,m) II If 'Yes,' the partnership is not required to complete Schedules L, M.1, and M.2; Item F on page 1 of Form 1065; or Item N on Schedule K.l . . . , . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ' . . . . . . . . . . : . X 6 Does this partnership have any foreign partners? If 'Yes,' the partnership may have to file Forms 8804, 8805 and 8813. See th e instructions. . . . . , . . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , . . . . ' . . . . . . . . , X 7 Is this partnership a publicly traded partnership as defined in section 469(k)(2)? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ' . . , X 8 Has this partnership filed, or is it required to file, a return under section 6111 to provide information on any reportable transaction? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . , . . . . . . . . . . X 9 At any time during calendar year 2005, did the partnership have an interest in or a signature or other authority over a financial account in a foreign country (such as a bank account, securities account, or other financial account)? See the instructions for exc iling requirements for Form TD F 90.22.1. If 'Yes,' enter the name of the foreign country. ~ X Page 2 eginning of year. 1 s cost of items withdrawn for personal use. 2 3 tion 263A costs ent) ent) 5 es 1 through 5. 6 nd of year. 7 s sold. Subtract line 7 from line 6. Enter here and on page 1, line 2 8 ------------------------------------------------ 10 During the tax year, did the partnership receive a distribution from, or was it the grantor of, or transferor to, a foreign trust? If 'Yes,' the partnership may have to file Form 3520. See the instructions. . . . . . . . . , . . . . . . . . . . . . . , ' . . . . , . , . , . . . . . . . . . . . . . . , X 11 Was there a distribution of property or a transfer (for example, by sale or death) of a partnership interest during the tax year? If 'Yes,' you may elect to adjust the basis of the partnership's assets under section 754 by attaching the statement described under Elections Made By the Partnership in the instructions. . , . , . . . ' . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . X 12 Enter the number of Forms 8865, Return of U.S. Persons With Respect to Certain Foreign Partnerships, attached to this return. . ' . . , , . . . . . . , . . . , . . . . . . . . . . . . . . . . ' . . . . . ' . . . . . ' , . . . . . , . .' ... 0 Designation of Tax Matters Partner (see the instructions) Enter below the general partner designated as the tax matters partner (TMP) for the tax year of this return: Name of designated TMP ~ Address of designated TMP ~ RONALD L. FELTY 113 S. MARKET ST. ELIZABETHTOWN, PA 17022 Identifying number ofTMP ~ Form 1065 (2005) PTPA0112L 12/28/05 Form 1065 (2005) SUSQUEHANN. ALLEY PARTNERS 23-2713531 :$(;;bijd.UlijJ~rt?:: Partners' Distributive Share Items 1 Ordinary business income (loss) (page 1, line 22). . . . . . . 2 Net rental real estate income (loss) (attach Form 8825) . . . . . . . . . . . . . . . . 3a Other gross rental income (loss). . . . . . . . . . . . . . . . . . . . . . .Iu_~ b Expenses from other rental activities (attach stmt). . . . . . . . . . . . . . . . . . . .. .... ~ c Other net rental income (loss). Subtract line 3b from line 3a. . . . . . . . . . . . . . . . . . . . . 4 Guaranteed payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Interest income. . . . . . . . . . . . . . . .. ............ . . . . . . . . . . . . . . . . . . . . . . . 6 Dividends: a Ordinary dividends. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b Qualified dividends. . . . . . . . . . . . . . . . . . . . . . . . . . . . .. .~ 7 Royalties................... . . . . . . . . . . . . . . . . . . . . . . . . . 8 Net short-term capital gain (loss) (attach Schedule 0 (Form 1065)). . . . . 9a Net long-term capital gain (loss) (attach Schedule 0 (Form 1065)). . . . . . . . . . . . . . . . . . . . . . . . . b Collectibles (28%) gain (loss)... .. ............................. .~ c Unrecaptured section 1250 gain (attach statement) . . . . . . . . . . . . . . . . . . . . . . . . . ~ 10 Net section 1231 gain (loss) (attach Form 4797). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Other income (loss) (see instructions) Type ~ 12 Section 179 deduction (attach Form 4562) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Deduc- 13a Contributions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . tions b Investment interest expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . c Section 59(e)(2) expenditures: (1) Type ~ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ (2) Amount ~ d Other deductions (see instructions) T pe ~ 14a Net earnings (loss) from self-employment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b Gross farming or fishing income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . c Gross nonfarm income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15a Low-income housing credit (section 420)(5)) ... .................... ....... .... .. ... b Low-income housing credit (other) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . c Qualified rehabilitation expenditures (rental real estate) (attach Form 3468). . . . . . . . . . . . . . . . d Other rental real estate credits (see instructions). Type ~ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ e Other rental credits (see instructions) . . . . . . . . . ., Type ~ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ t Other credits and credit recapture (see instructions) . . . . . . . . Type ~ 16a Name of country or U.S. possession.. ~ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ ___ b Gross income from all sources. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . c Gross income sourced at partner level. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Foreign gross income sourced at partnership level d Passive ~ _ _ _ _ _ _ _ _ _ e Listed categories (attach statement) ~ _ _ _ _ _ _ _ _ t Generallimitatioll Deductions allocated and apportioned at partner level 9 Interest expense ~ _ _ _ _ _ _ _ _ _ _ _ h Other.................................... Deductions allocated and apportioned at partnership level to foreign source income i Passive ~ j Listed categories (attach statement) ~ I Total foreig;t;x-;s-(;;-h;Ck one): ~ Paid D A;;-c~;d- 0- -- m Reduction in taxes available for credit (attach statement). . . . . . . . . . . . . . . . . . . . . n Other foreign tax information (attach statement). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 a Post-1986 depreciation adjustment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b Adjusted gain or loss. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . c Depletion (other than oil and gas). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . d Oil, gas, and geothermal properties - gross income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . e Oil, gas, and geothermal properties - deductions. . . . . . . t other AMT items (attach stmt) . . . . . . . . . . . . . . . . . . . . . . . 18a Tax-exempt interest income............. ... ................................... b Other tax-exempt income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . c Nondeductible expenses. . . . . . . . . . . . . . . . . . . . . . . . 19 a Distributions of cash and marketable securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b Distributions of other property. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 a Investment income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b Investment expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . c Other items and amounts attach stmt). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Income (Loss) Self- Employ- ment Credits & Credit Recap- ture Foreign Trans- actions Alternative Minimum Tax (AMT) Items Other Infor- mation BAA kGenerallimitation. . PTP AO 134L 07/26/05 Pa e 3 Total amount 54,477. 151. 7 8 9a -24,286. 1:.III:I.III:~.I::I:.:I'.:i:..I.::i 10 11 12 13a 13b 13c (2) 13d 14a 14b 14c 15a 15b 15c 15d 15e 15t 17a -20. 17b 17c 17d 17e 17f 18a 18b 18c 19a 38 000. 19b 20a 151. 20b Form 1065 (2005) Form 1065 (2005) SUSQUEHANNA Analysis of Net Income (Loss) .LEY PARTNERS 23-2713531 Page 4 1 Net income (loss). Combine Schedule K, lines 1 through 11. From the result, subtract the sum of ...J I Schedule K, lines 12 throuoh 13d, and 161. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 30,342. 2 Analysis by (I) Corporate (ii) Individual (iii) Individual (iv) Partnership (v) Exempt (vi) Nominee/Other partner type: (active) (passive) organization a General 7,508. partners . . , b ;~~..~s . 21,032. 1,802. 1 Cash. . . . . . . . . . . . . . . . 2a Trade notes and accounts receivable. . . . . . . b Less allowance for bad debts. . . . . . . . . . . . . . . 3 Inventories................. . . . . . . . . . . 4 U.S. government obligations. . . . . . . . . . . . . . . 5 Tax-exempt securities. . . . . . .. ............ 6 Other current assets (attach stmt). . . . .SE.E. .sT. .1. 7 Mortgage and real estate loans. . . . . . . . . . . . . 8 Other investments (attach stmt) . . . . . . . . . . . . 9 a Buildings and other depreciable assets. . . . . . b Less accumulated depreciation. . . . . . . . . . . . . lOa Depletable assets. . . . . . . . . . . . . . . . . . . . b Less accumulated depletion. . . . . . . . . . . 11 Land (net of any amortization). . . . . . . . . . . . . . 12 a Intangible assets (amortizable only). . . . . . . . . b Less accumulated amortization. . . . . . . . . . . . . 13 Other assets (attach stmt) . . . . .SEE. .ST .2 14 Total assets. . . . . . . . . . . . . . . . . . . . . . . . . . . Liabilities and Capital 15 Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . 16 Mortgages, notes, bonds payable in less than 1 year. . . . 17 Other current liabilities (attach stmt). . .SE.E. .ST. .3. 18 All nonrecourse loans. . . . . . . . . . . . . . . . . . . . . 19 Mortgages, notes, bonds payable in 1 year or more. . . . . 20 Other liabilities (attachstmt)........ .. .. ....... . 21 Partners' capital accounts. . . . . . . . . . . . . . . . . . 22 Total liabilities and capital. . . . . . . . . . . . . . . . . . ~i. 'ctW;ld:u ~4Y.IM/~ Reconciliation of Income 1 Net income (loss) per books. . . . . . . . . . . . . 2 Income included on Schedule K, lines 1, 2, 3c, 5, 6a, 7, 8, 9a, 10, and 11, not recorded on books this year (itemize): 3 Guaranteed pmts (other than health insurance). . . . . 4 Expenses recorded on books this year not included on Schedule K, lines 1 through 13d, and 161 (itemize): a Depreciation. . . $ b T ravel and entertainment. . $ 5 Add lines 1 throu h 4. . ::Sc.nijd'Ule."Jii18Zm Anal sis of Partners' Ca 1 Balance at beginning of year. 2 Capital contributed: a Cash. . . . . . . . b Property. . . . . . . . 3 Net income (loss) per books. . 4 Other increases (itemize): 5 Add lines 1 throu h 4. . uired if Question 5 of Schedule B is answered 'Yes.' Beginning of tax year End of tax year (a) (b) 22,853. 4,354. it 4,470. 975,144. 809,216. 506,061. 4 , 1 6 5. :~~:f:/m:::~::mm::::::mj:mf:m:mfmm:m::mmf:m:':~i 2,347. 1,818. 2,288. ~~~!~:jii:~ij:~:~:~:~:~lj[j~1ij:1:~:1:1:~:1iji~:~i1:~~~:~:~:~:~i~:~:1:~j1:1:jj!i1i1:~iji 5,799. 19,294. 99,408. 725,275. 714,988. 600,774. 107,066. 845,368. Loss) er Books With Income (Loss er Return 30, 342. 6 Income recorded on books this year not included on Schedule K, lines 1 through 11 (itemize): a Tax-exempt mterest .. $_ _ _ _ _ _ _ _ _ __ 7 Deductions included on Schedule K, lines 1 through 13d, and 161, not charged against book income this year (itemize): a Depreciation. . . .. $ 30,342. ita I Accounts 107,066. 8 Add lines 6 and 7. . . . . . . . . . . . . . . . . . 9 Income (loss) (Analysis of Net Income (Loss), line 1). Subtract line 8 from line 5. . . 30 342. 6 Distributions: a Cash. . . . . . . . b Property. . . . . 7 Other decreases (itemize): 38,000. 30,342. 8 Add lines 6 and 7. . . 137, 408. 9 Balance at end of year. Subtract line 8 from line 5. PTPA0134L 07/26/05 38,000. 99,408. Form 1065 (2005) Rental Real Estate Income and Expenses of a Partnership or an S Corporation ~ 5ee instructions. ~ Attach to Form 1065, Form 1065-B, or Form 11205. Form 8825 'epartment of the Tre~sury ,ternal Revenue Service OMS No. 1545-1186 2005 Employer idenlllication number Name SUSQUEHANNA VALLEY PARTNERS 23-2713531 1 Show the kind and location of each property. See page 2 to list additional properties. A 1'h-~~ h-~P_1'QW_NllQUl'!; ]j:ll'Phk - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -- SELINSGROVE, PA B ----------------------------------------------------------------- c ______________________________________________________----------- D ----------------------------------------------------------------- Rental Real Estate Income 2 Gross rents. . . . . . . . . . . . . . . . . . . Rental Real Estate Expenses 3 Advertising.. _ . . . . . _ . . _ . . . . . . . . . . . . . . 4 Auto and travel. . . . . . . . . . . . . . . . . . . . . . 5 Cleaning and maintenance. . . . . . . . . . . . 6 Commissions.... _ . . . . . . . . . . . . . . . . . . . 7 Insurance............ _ . . . . . . . . . . . . . . 8 Legal and other professional fees. . . . _ . 9 Interest.. 10 Repairs... . . . . . . . . . 11 Taxes... ...................... 12 Utilities. . . . . . . . . . . . . . . . . . . . - . . . . 13 Wages and salaries. . . . . . . . . . 14 Depreciation (see instructions). . . . . . . . . 15 Other (list) ~ ____________ SEE STATEMENT 4 -- - -- ---- ------ --- -- 15 Properties A B 2 190,574. 3 4 5 6 7 8 9 10 11 12 13 14 2,700. 4,252. 26,809. 15 413. 8,324. 341. 64,559. 13,699. 16 Total expenses for each property. Add lines 3 through 15. .. .. .. .. .. .. .. . 16 136, 097 . 17 Total gross rents. Add gross rents from line 2, columns A through H . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Total expenses. Add total expenses from line 16, columns A through H.............. ... . ........... 19 Net gain (loss) from Form 4797, Part II, line 17, from the disposition of property from rental real estate activities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 a Net income (loss) from rental real estate activities from partnerships, estates, and trusts in which this partnership or S corporation is a partner or beneficiary (from Schedule K-l). . . . . . . . . . . . . . . . . . . . . . . . b Identify below the partnerships, estates, or trusts from which net income (loss) is shown on line 20a. Attach a schedule if more space is needed: (1) Name (2) Employer identification number 21 Net rental real estate income (loss). Combine lines 17 through 20a. Enter the result here and on: . Form 1065 or 11205: Schedule K, line 2, or . Form 1065-B: Part I, line 4 BAA For Paperwork Reduction Act Notice, see the separate instructions. SPSZOl 01 L 11/1 0105 c D 17 18 190,574. -136,097. 19 20a Form 8825 (2005) OMS No. 1545-0172 Form 4562 Depreciation and Amortization (Including Information on Listed Property) (Rev January 2006) Department of the Treasury temal Revenue Service .arne(s) shown on return 2005 ~ See separate instructions. ~ Attach to your tax return. Attachment Sequence No. 67 Identifying number 23-2713531 SUSQUEHANNA VALLEY PARTNERS Business or activity to which this form relates FORM 8825, RENTAL REAL ESTATE - PARK AND TOWNHOUSE RENTAL l~e~n'V~}1{1:1 Election To Expense Certain Propert}f Under Section 179 Note: If you have any listed property, complete Part V before you complete Part I. 1 Maximum amount. See the instructions for a higher limit for certain businesses. . . . . . . . . . . . . _ . . _ . . . 1 2 Total cost of section 179 property placed in service (see instructions). . . . . . . . . . . . , . . . . _ . . . . . . 2 3 Threshold cost of section 179 property before reduction in limitation. _ . . . ' , . . , . . . ' 3 4 Reduction in limitation. Subtract line 3 from line 2. If zero or less, enter -0-, , . . , . . . . . , . . . . . . . . , . . ' 4 5 Dollar limitation for tax year. Subtract line 4 from line 1. If zero or less, enter -0-. If married filing se aratel , see instructions. . . . . . . . . , , . . . . . . . . . . . . . . . . ' . . , . . , . ' ' . , . . , . . . . . . . . . ' , " . . . . . . . . , ' , 5 $105,000. $420,000. 6 a Description of properly b Cost (business use only) C Elected cost 7 Listed property. Enter the amount from line 29. , . . . . ' . . . . . . , . . . . . . . . . . . . . . , . . . . . . . 7 8 Total elected cost of section 179 property. Add amounts in column (c), lines 6 and 7. , . . . . . . . . . . . . . . . . . , 8 9 Tentative deduction. Enter the smaller of line 5 or line 8 . . . . . . . . . . . . . . . . . ' . . . . . . ' . . . . . . . . . . . . . . . . . , . . . . . . 9 10 Carryover of disallowed deduction from line 13 of your 2004 Form 4562. ........ ... ..... ... ..' ...... . ., .... 10 11 Business Income limitation. Enter the smaller of business income (not less than zero) or line 5 (see instrs).., 11 12 Section 179 expense deduction. Add lines 9 and 10, but do not enter more than line 11. . . . ' . . , . . . . . . . 12 13 Carr over of disallowed deduction to 2006. Add lines 9 and 10, less line 12...... " ~ 13 Note: Do not use Part /I or Part /II below for "sted property. Instead, use Part V. I 'ff'll''''1 ::Pa':\ :')/,: Special DepreCiatIOn Allowance and Other DepreCIatIOn (Do not include listed prooertv.) (See instructions.) ..,................." 14 Special allowance for certain aircraft, certain cfroperty with a long production period, and qualified New York Liberty or GO Zone property (other than liste property) placed in service dunng the tax year (see instrs) , . . . , 14 15 Property subject to section 168(f)(1) election, .. . ...,... ... ......... -... ...,........... ..... ...... , ...,. . 15 16 Other depreciation (including ACRS) . . . ......,..... . .. . .,...... , ......, . , . . . . . . . . . . . , ,.....,... . .,.. . 16 64,505. ..... . "" 1:,e~"J'l((1 MACRS Depreciation (Do not include listed property.) (See instructions) Section A ~~ ~~~:c~',~::::~~~;o;c::':~:':~:=~np::;:~:~~:';::;i~:g;:i~:, ~:f:;:n:~5n~ ~;mo~~. ;;~~C;, . ~_~~ asset accounts, check here. . . . , . . . . . . . , . . . . . . . . , . . . . . . . . . . . . . . . . , . . . , . . , . . . . . . . . . . . . . . . . . . ~1tmm::\mmmtmm??mm:\1t????mmm\ Section B - Assets Placed in Service During 2005 Tax Year Using the General Depreciation System (a) Classification of property (b) Month and year placed in service (c) Basis for depreciation (businesslinvestment use only - see instructions) (d) Recovery period (e) Convention (f) Method (g) Depreciation deduction 19 a 3-year property b 5-year property c 7 -year propertv. d 10-year property e l5-year property f 20-year property g 25-year property h Residential rental property. i Nonresidential real property. 25 vrs 27 5 vrs 27 5 vrs 39 vrs MM MM MM MM S/L S/L S/1 S/L S/L 20 a Class life. . b l2-year . . . c 40- ear. ]{iftJIVrJ Summa (see instructions) 21 Listed property. Enter amount from line 28. . . . . . . . . . . .. ..,......... ' . . . , . . . . , 22 Total. Add amounts from line 12, lines 14 through 17, lines 19 and 20 in column (g), and line 21. Enter here and on the appropriate lines of your return, Partnerships and S corporations - see instructions. . . . . . . . . ' . , 23 For assets shown above and placed in service during the current year, enter the portion of the basis attributable to section 263A costs. . , . . . . . . , . . . . . . . , BAA For Paperwork Reduction Act Notice, see separate instructions. Section C - Assets Placed in Service During 2005 Tax Year Using the Alternative Depreciation System . . . . . . . . . ~~~: MM ~;t I 23 ..~ ....... 22 t..."i~ Form 4562 (2005) (Rev 1.2006) FDIZ0812L 12/29/05 Form 4562 (2005) (Rev 1-2006) SUSQ _lNNA VALLEY PARTNERS 23-2713531 Page 2 I:PaftiM' ,::n Listed Property (Include automobiles, certain other vehicles, cellular telephones, certain computers, and property used for entertainment, recreation, or amusement.) Note: For any vehicle for which you are using the standard mileage rate or deducting lease expense, complete only 24a, 24b, columns (a) through (c) of Section A, all of Section B, and Section C if applicable. Section A - De reciation and Other Information Caution: See the instructions for limits for assen er automobiles) 24a Do you have evidence to support the business/investment use claimed? . . . . . . Yes No 24b If 'Yes,' is the eVidence written? . Yes (a) (b) (c) (d) (e) (f) (g) (h) Type of property (list Date placed BUSiness! Cost or Basis for depreciation Recovery Method! Depreciation vehicles first) in service Inve~~~ent other basis (business/investment period Convention deduction percentage use only) 25 Special allowance for certain aircraft, certain property with a long production period, and qualified New York Liberty or GO Zone property placed in service during the tax year and used more than 50% in a qualified business use (see instructions). 25 26 Pmpeely "'d I'" th,n 50% r' ""'lif"l b",'oo" "'" I~ No (i) Elected section 179 cost 27 Property used 50% or less in a qualified business use: 28 Add amounts in column (h), lines 25 through 27. Enter here and on line 21, page 1. . . . . . . . . . . . . . . . . 29 Add amounts in column (i), line 26. Enter here and on line 7, page 1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section B - Information on Use of Vehicles Complete this section for vehicles used by a sole proprietor, partner, or other 'more than 5% owner,' or related person. If you provided vehicles to your employees, first answer the questions in Section C to see if you meet an exception to completing this section for those vehicles. 28 (a) (b) (c) (d) (e) (f) 30 Total businesslinvestment miles driven Vehicle 1 Vehicle 2 Vehicle 3 Vehicle 4 Vehicle 5 Vehicle 6 dUring the year (do not include commuting miles). . . . . . ...,. , ..,.. , . . . . , . . 31 Total commuting miles driven during the year. . . . . . . . . 32 Total other personal (noncommuting) miles driven. .,..........."...., , .... . 33 Total miles driven during the year. Add lines 30 through 32. . . . . . . . . . . . . . . . . . . . . . . . Yes No Yes No Yes No Yes No Yes No Yes No 34 Was the vehicle available for personal use during off-duty hours? . . . . . . . . . . . . . . . . . . . . . 35 Was the vehicle used primarily by a more than 5% owner or related person? . . . . , . . . , , 36 Is another vehicle available for personal use? . , . . . . , . . . . . , . , , , . , , . , . . , . . . Section C - Questions for Employers Who Provide Vehicles for Use by Their Employees Answer these questions to determine if you meet an exception to completing Section B for vehicles used by employees who are not more than 5% owners or related persons (see instructions). 37 Do you maintain a written policy statement that prohibits all personal use of vehicles, including commuting, by your employees? , , , , . , . , , . . . , . . . . . . . , . , . , , , , , , , , . . . . . . . , . . , . , . . . , , . . , , . . . , . . , , . . . . . . , , , Yes No 38 Do you maintain a written policy statement that prohibits personal use of vehicles, exceBt commuting, t)y your employees? See the instructions for vehicles used by corporate officers, directors, or 1 Yo or more owners. , . . . . , , . 39 Do you treat all use of vehicles by employees as personal use? . . , . , . . . , . . , , . . . , . . , , , , . . , . . . , , . , , . 40 Do you provide more than five vehicles to your employees, obtain information from your employees about the use of the vehicles, and retain the Information received? . , . . , . . . , . . . . . . . . , . , . . , . , . , . . . . . . . . . , . . . . , , , , , , , . . . . . . , , , . . 41 Do you meet the requirements concerning qualified automobile demonstration use? (See instructions) , , . . , . . , , , . . . , , , , , . . Note: If your answer to 37, 38, 39, 40, or 47 IS 'Yes,' do not complete Section B for the covered vehicles. Amortization (a) (b) (c) (d) Code section (e) (f) Amortization for this year Description of costs Date amortization begins Amortizable amount Amortization period Of percentage 42 Amortization of costs that begins during your 2005 tax year (see instructions): I I I I . " . .1 43 .144 Form 4562 (2005) 1,185. 1,185. (Rev 1-2006) 43 44 Amortization of costs that began before your 2005 tax year. . Total. Add amounts in column (t). See instructions for where to report. . FDIZ0812L 12!29105 Schedule D OMS No. 1545-0099 (Form 1065) Capital Gains and Losses 2005 Department of the Treasury Internal Revenue Service ~ Attach to Form 1065. ame of partnership I Employer identification number SUSQUEHANNA VALLEY PARTNERS 23-2713531 W~adJ((mn Short-Term Capital Gains and Losses - Assets Held 1 Year or Less 1 (a) Description of property (b) Date acquired (C) Date sold (d) Sales price (e) Cost or other basIs (I) Gain or (1055) (e.g., 100 shares of 'Z' Co) (month, day, year) (month, day, year) (see instructions) (see instructions) Subtract (e) from (d) 2 Short-term capital gain from installment sales from Form 6252, line 26 or 37 , . ,.,...., . '.........,........ . 2 3 Short-term capital gain (loss) from like-kind exchanges from Form 8824 _ . . . . . . . , . . . . , . . , ........... , ..... . 3 4 Partnership's share of net short-term capital gain (loss), including specially allocated short-term capital gains (losses), from other partnerships, estates, and trusts, . . . . . . . . . . . . . . . . . . . . . . . . . . . . , . . . . . . . , . . , , . . . . . . . . . . 4 5 ~~~~~~I~-ke,rWn~af~~ll~ai~. ~~ (I.o~~).. _CO~bi~.~ lines. 1 . t.hr~u.~~ 4. i.~ c~.lu~n (f)... En~er ~.ere. ~~~. o~. Form .1065.'. . 5 IJMM1UnW??1 Long-Term Capital Gains and Losses - Assets Held More Than 1 Year 6 (a) Description of property (b) Date acquired (C) Date sold (d) Sales price (e) Cm,t or other basis (f) Gain or (1055) (e.g., 100 shares of 'Z' Co) (month, day, year) (month, day, year) (see instructions) (see instructions) Subtract (e) from (d) LOT SALES VARIOUS VARIOUS 33,000. 57,286. -24,286. 7 Long-term capital gain from installment sales from Form 6252, line 26 or 37. , . . , . . . . . , . , . . . . , , . . . , . , . . . ... , 7 8 Long-term capital gain (loss) from like-kind exchanges from Form 8824. , . . . . . . . . . . . . . . - . . . . . . . . . . . . . . . . . 8 9 Partnership's share of net long-term capital gain (loss), Including speCially allocated long-term capital gains (losses), from other partnerships, estates, and trusts. . . ., . ....,...,... . . , , . . . . . . . .. ....... .. . 9 10 Capital gain distributions. . . . . . . . , "..".,...,...,.........................,..,...'.....,....."...... . 10 11 ~~~~~~?~tK~i~:~i~a~~iit. or(loss).Co~bi.n~ Hne.~ 6. ~hroug~ .1.0 I~COI~~~ (?'. Enter .h.ere an.d. on. ~orrn .10.65" . 11 -24,286. BAA For Privacy Act and Paperwork Reduction Act Notice, see instructions for Form 1065. Schedule 0 (Form 1065) 2005 PTPA0201L 10106/05 651105 2005 n Final K-1 n Amended K-1 OMS No. 1545-0099 Schedule K-' 1\e,irlJIUmmJ Partner's Share IOf Current Year Income, (Form 1065) For calendar year 2005, or tax Deductions, Credits, and Other Items epartment of the Treasury year beginning ,2005 , Ordinary business income (loss) 15 Credits & credit recapture Internal Revenue Service ending - -------------- Partner's Share of Income, Deductions, 2 Net rental real estate income (loss) * 4,315" Credits, etc. ~ See separate instructions. 3 Other net rental income (loss) 16 Foreign transactions Hml?:ifKfHHl Information About the Partnership - -------------- 4 Guaranteed payments A Partnership's employer identification number - -------------- 23-2713531 5 Interest income B Partnership's name, address, city, state, and ZIP code 12. - -------------- 6a Ordinary dividends SUSQUEHANNA VALLEY PARTNERS - -------------- P.O. BOX 151 6b Qualified dividends ELIZABETHTOWN, PA 17022 -------------- c IRS Center where partnership filed return 7 Royalties CINCINNATI, OH -------------- 0 Check if this is a publicly traded partnership (PTP) 8 Net short. term capital gain (loss) - E Tax shelter registration number, if any - F Check if Form 8271 is attached 9a Net long-term capital gain (loss) 17 Alternative minimum tax (AMT) items - -1,923. A -2. -------------- !..P(.t:fU....l Information About the Partner 9b Collectibles (28%) gain (loss) ::::::Ja.: ( /?: -------------- G Partner's identifying number 9c Unrecaptured section 1250 gain 184-12-4759 H Partner's name, address, city, state, and ZIP code 10 Net section 1231 gain (loss) 18 Tax-exempt income and nondeductible expenses M. GRACE WALTER 11 Other income (loss) 1-- -------------- R. D. #4, BOX 175 NEWVILLE, PA 17241 - ---------------- o General partner or LLC [K] Limited partner or other 1-- -------------- I member-manager LLC member - ---------------- J IKJ Domestic partner OF oreign partner 19 Distributions 12 Section 179 deduction A __ __ _ _ ___jr...O_O,Q:... K What type of entity is this partner? INDIVIDUAL 1-- 13 Other deductions L Partner's share of profit, loss, and capital: 20 Other information Beginning Ending - --------------~- Profit 7.92 9.,- 7.92 9.,- 0 0 A 12. 7.92 9.,- 7.92 9.,- 1-- Loss 0 0 ---------------- - -------------- Capital 7.92 9.,- 7.92 9.,- 0 0 - -------------- M Partner's share of liabilities at year end: 14 Self-employment earnings (Ios~;) Nonrecourse. . . . . . . . . . . . . . . . . . . . . . . . . $ 1-- -- --- ------ ----- - -------------- Qualified nonrecourse financing. ... , ...$ Recourse. . . . . ... . ....... , . . . . . ...... $ *See attached statement for additional information. N Partner's capital account analysis: F .. $ -2,925. 0 Beginning capital account. . . . . . . . . . . R Capital contributed during the year. . . .$ I ...$ 2,404. R Current year increase (decrease). . . . 5 Withdrawals and distributions. ........ . $ ( 4,000.) u ...$ -4,521. 5 Ending capital account. . . . . . . ..... , E I 0 ~ T ax basis DGAAP o Section 704(b) book N L Other (explain) y BAA For Privacy Act and Paperwork Reduction Act Notice, see Instructions for Form 1065. PARTNER 27 Schedule K-l (Form 1065) 2005 PTPA0312L 01/04/06 SUSQUEHANNA VALLEY PARTNERS 23-2713531 SUPPLEMENTAL INFORMATION I SCHEi~il :~R:~:~2::T A TE ACTIVITI ES PAGE 2 PROPERTY GROSS NET NET PASSIVE SEC. 1231 DESCRIPTION INCOME EXPENSES INCOME NONPASS TOTAL PARK AND TOWNHOUSE RENTAL 15,093. 10,779. $ 4,314. PASSIVE ROUNDING OR SPECIALLY ALLOCATED NET INCOME (LOSS) ADJUSTMENT 1. TOTAL $ 4,315. I PARTNER 27: M. GRACE WALTER 184-12-4759 SPSL1201L 07/31/03 STATEMENT 1 FORM 1065, SCHEDULE L, LINE 6 OTHER CURRENT ASSETS PREPAID INSURANCE...... PREPAID TAXES... BEGINNING .............. .. $ 573. $ .......... ...... 3,781. TOTAL ~ 4,354. $ ENDING 662. 3,808. 4,470. STATEMENT 2 FORM 1065, SCHEDULE L, LINE 13 OTHER ASSETS SYNDICATION COSTS.... BEGINNING ........ $ 75,492. $ TOTAL ~ 75,492. $ ENDING 75,492. 75,492. STATEMENT 3 FORM 1065, SCHEDULE L, LINE 17 OTHER CURRENT LIABILITIES ACCRUED INTEREST............................................ PREPAID RENTS.......... .................... ................ SECURITY DEPOSITS................................................ BEGINNING ENDING ......... . . $ o. $ 1,359. ...,...,... . 5,565. 5,800. .........., . 10,590. 12,135. TOTAL ~ 16,155. $ 19,294. STATEMENT 4 FORM 8825, LINE 15 OTHER EXPENSES PROPERTY A: PARK AND TOWNHOUSE RENTAL - SELINSGROVE, PA PROPERTY B: - PROPERTY C: - PROPERTY D: - PROPERTY A PROPERTY B PROPERTY C PROPERTY D AMORTIZATION...... . MANAGEMENT FEES...... OFFICE EXPENSE. POSTAGE. TRASH. . . . . . . . . . ............... $ TOTAL $ 1,185. 525. 472 . 121. 11,396. 13,699. U.S. Return of Partnership Income For calendar year 2004, or tax year beginning ,2004, and ending , 20 ~ See se arate instructions. OMS No.1545.0099 Form 1 065 2004 'eparlmenl of the Treasury lternal Revenue Service D Employer identification number RENTAL A Principal business activity 23-2713531 B Principal product or service PARK Use the IRS label. Other- wise, print or type. SUSQUEHANNA VALLEY PARTNERS P.O. BOX 151 ELIZABETHTOWN, PA 17022 E Date business started 6/02/1993 F Total assets (see instrs) C Business code number 531110 $ 845,368. G Check applicable boxes: (1) Initial return (2) Final return (3) Name change (4) Address change (5) Amended return H Check accounting method: (1) Cash (2) X Accrual (3) Other (specify). . .. ~ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ Number of Schedules K.1. Attach one for each person who was a partner at any time during the tax year. . . ~ 33 Caution: Include only trade or business income and expenses on lines la through 22 below See the instructions for more information. 5 E E I N 5 T R D u c E T D I U 0 N C 5 T I F 0 0 R N S L I M I T A T I 0 N 5 Sign Here paid Preparer's Use Only 1 a Gross receipts or sales. b Less returns and allowances. 1a 1b 1c I N C o M E 2 3 2 Cost of goods sold (Schedule A, line 8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Gross profit. Subtract line 2 from line 1 c. . . . . . . . . . . . . . . . . . . . . 4 Ordinary income (loss) from other partnerships, estates, and trusts (attach schedule) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Net farm profit (loss) (attach Schedule F (Form 1040)). . 6 Net gain (loss) from Form 4797, Part II, line 17. ... ... . .... 4 5 6 7 Other income (loss) (attach statement) . . . . 7 8 Total income (loss). Combine lines 3 through 7. 8 9 Salaries and wages (other than to partners) (less employment credits) . . . 10 Guaranteed payments to partners.. .......... . . . . . . . . . 11 Repairs and maintenance. . . . 12 Bad debts. . . . . . . . . . . . . . . . . . . . . . . . 13 Rent........ . . . . . . . . . . 14 Taxes and licenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Interest......... . . . . . . . . . . . . . . . . . . . . 16a Depreciation (if reqUired, attach Form 4562). ..... .. . .............. ... I 16al b Less depreciation reported on Schedule A and elsewhere on return. . . .. ~ 17 Depletion (Do not deduct oil and gas depletion.) . . . . . . . . . . . . . . . . 18 Retirement plans, etc. . . . . . . . . . . . . . 19 Employee benefit programs. . . . . . 9 10 11 12 13 14 15 16c 17 18 19 20 Other deductions (attach statement) . . 20 21 Total deductions. Add the amounts shown in the far right column for lines 9 through 20. . . 21 22 Ordinary business income (loss). Subtract line 21 from line 8. ......... 22 Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and statements, and to the best of my knowledge and belief, It is true, correct, and complete. Declaration of preparer (other than general partner or limited liability company member) is based on all information of which preparer has any knowledge. ~ ~ May the IRS discuss this return with the prefarer shown below (see instrs). X Yes Prepare,s SSN or PTIN ~~Co-&B(~ Preparer's signature Date No Signature of general partner or limited liability company manager Date 2/02/05 Check if self. employed . ~ Firm's name (or yours it self.employed). address, and ZIP code FELTY & ~ 113 S MA ST ELIZABETHTOWN, PA 17022 EIN ~ 23-2003867 Phone no. (71 7) 3 67 - 9 3 9 6 PTF'A0105L 01/06/05 Form 1065 (2004) BAA For Privacy Act and Paperwork Reduction Act Notice, see separate instructions. Form 1065 (2004) SUSQUEHANNA VAL.LEY PARTNERS 23-2713531 1:$.qt1~,#,'lUJijA:)@l Cost of Goods Sold (see instructions) Page 2 1 Inventory at beginning of year. . . 1 2 Purchases less cost of items withdrawn for personal use. 2 3 Cost of labor. . . 3 4 Additional section 263A costs (attach statement) . .. . . . 4 5 Other costs (attach statement) . . . 5 6 Total. Add lines 1 through 5. . . . . . . . . 6 7 Inventory at end of year. . . . . . . 7 B Cost 01 goods sold. Subtract line 7 from line 6. Enter here and on page 1, line 2. B 9 a Check all methods used for valuing clOSing inventory: (i) ~ Cost as described In Regulations section 1.471-3 (ii) Lower of cost or market as described In Regulations section 1.471-4 (Hi) Other (specify method used and attach explanation) . .. . .. ... _ ~ b Check this box If there was a writedown of 'subnormal' goods as described in Regulations section 1.471-2(c). ~ ~ c Check this box if the LIFO inventory method was adopted this tax year for any goods (if checked, attach Form 970). d Do ,,, col" of "ctl" 263A (foe pcopocfy pcodu"d oe ooqul"d foe "",,) ,pply t~ :: P~~O~'~h::.- - n - - - - - -~ ~ ::u - N~ - e Was there any change in determining quantities, cost, or valuations between opening and closing inventory? D Yes No If 'Yes', attach explanation. . 1::?$.ij~9#J~4!.~f))1 Other Information 1 What type of entity is filing this return? Check the applicable box: a ~ Domestic general partnership b B Domestic limited partnership c Domestic limited liability company d Domestic limited liability partnership e Foreign partnership 1 Other. . .. ~ 2 Are any partners in this partnership also partnerships? . . . . . . . . . . . _ . . . . . 3 During the partnership's tax year, did the partnership own any interest in another partnership or in any foreign entity that was disregarded as an entity separate from its owner under Regulations sections 301.7701-2 and 301.7701-3? If yes, see instructions for required attachment. . . . . . _ . . . . . . . . . . . . . . . . . . . . . . . . . _ . . . . . . 4 Did the partnership file Form 8893, Election of Partnership Level Tax Treatment, or an election stateml'mt under section 6231 (a)(1)(8)(ii) for partnership-level tax treatment, that is in effect for this tax year? See Form 8893 for more details. . . . . . 5 Does this partnership meet all three of the following requirements? a The partnership's total receipts for the tax year were less than $250,000; b The partnership's total assets at the end of the tax year were less than $600,000; and c Schedules K-1 are filed with the return and furnished to the partners on or before the due date (including extensions) for the partnership return. If 'Yes,' the partnership is not required to complete Schedules L, M- 1, and M-2; Item F on page 1 of Form 1065; or Item N on Schedule K-l. . . . . . . . . . . . . . . . . . _ . . . . . . . . . . . . . . . . . . _ . . . . . . . . _ . . . . . . . . . . . . . . . . . 6 Does this partnership have any foreign partners? If 'Yes,' the partnership may have to file Forms 8804,8805 and 8813. See instructions. . . . . . . . . . 7 Is this partnership a publicly traded partnership as defined in section 469(k)(2)? . 8 Has this partnership filed, or is it required to file, Form 8264, Application for Registration of a Tax Shelter? 9 At any time during calendar year 2004, did the partnership have an interest in or a signature or other cluthority over a financial account in a foreign country (such as a bank account, securities account, or other financial account)? See the Instructions for exceptions and filing requirements for Form TD F 90-22.1. If 'Yes,' enter the name of the foreign country. ~ x x x x X X X X 10 During the tax year, did the partnership receive a distribution from, or was it the grantor of, or transferor to, a foreign trust? If 'Yes,' the partnership may have to file Form 3520, See Instructions. , , . . . , . . . . . . . . . . , , . . . . . . . . . . . . . . . . . . . _ . . . . , . . . , , . . . X 11 Was there a distribution of property or a transfer (e.g., by sale or death) of a partnership interest during the tax year? If 'Yes,' you may elect to adjust the basis of the partnership's assets under section 754 by attaching the statement deSCribed in the Instructions under Elections Made By the Partnership. . . . , . . _ . . , . . . . . . X 12 Enter the number of Forms 8865, Return of U.S. Persons With Respect to Certain Foreign Partnerships, attached to this return. . . . . . . . . . . . .... 0 Designation of Tax Matters Partner (see instructions) Enter below the general partner designated as the tax matters partner (TMP) for the tax year of this return: ~ame of designated TMP ... Address of deSignated TMP ... RONALD L. FELTY 113 S. MARKET ST. ELIZABETHTOWN, PA 17022 Identifying number ofTMP ... 164 - 3 8- 3 4 04 PTPA0112L 01/05/05 Form 1065 (2004) Form 1065 (2004) SUSQUEHANNh .ALLEY PARTNERS 23-2713531 ::$(:ib~(lUJ~i<K?i Partners' Distributive Share Items 1 Ordinary business income (loss) (page 1, line 22). . . . . . 2 Net rental real estate income (loss) (attach Form 8825) . 3a Other gross rental income (loss). . . . . . . b Expenses from other rental activities (attach stmt). . . . . . . . c Other net rental income (loss). Subtract line 3b from line 3a. 4 Guaranteed payments. . . . . . . . . . . . . . . . . . . . . . . . 5 Interest income. . 6 Dividends: a Ordinary dividends. b Qualified dividends. . . . . . . . . . . . . . Income (Loss) Deduc- tions Self- Employ- ment Credits \ Credit lecap- ture Foreign Trans- actions Alternative Minimum Tax (AMT) Items Other Infor- mation BAA .........., . ~ . 3b .~ 7 Royalties.. 8 Net short-term capital gain (loss) (attach Schedule D (Form 7065)). 9a Net long-term capital gain (loss) (attach Schedule D (Form 7065)). bCollectibles (28%) gain (loss).................... c Unrecaptured section 1250 gain (attach statement) . . . 10 Net section 1231 gain (loss) (attach Form 4797). . 11 Other income (loss) (attach statement) . 12 Section 179 deduction (attach Form 4562) . . . . . . 13a Contributions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b Deductions related to portfolio income (attach statement) . . . . . . . . . . . . . . . . . . . . c Investment interest expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . d Section 59(e)(2) expenditures: (1) Type ~ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ (2) Amount ~ e Other deductions (attach statement). . . . . . . . . . . . . . . . . . . . . . . . 14a Net earnings (loss) from self-employment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . b Gross farming or fishing income. . . . . . . . . . . c Gross nonfarm income. . . . . . . . . . . . . . . . . . . . . 15a Low-income housing credit (section 420)(5)) . . . . . . . . b Low-income housing credit (other) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . c Qualified rehabilitation expenditures (rental real estate) (attach Form 3468). . . . . . . . . . . . d Other rental real estate credits. . . . . . . . . . . . . . . . . . . . . .. ......... . . . . . . . . . . . . . . . . . . e Other rental credits. . . . . . . . 1 Other credits and credit recapture (attach statement). . . . . . . . . . . . . . . . . . . . . . . . 16a Name of country or U.S. possession.. ~ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ ___ b Gross income from all sources. . . . . . . . . . . . . . . . . . . . . c Gross income sourced at partner level. . . . . . . . . . . . . . . . . . . Foreign gross income sourced at partnership level d Passive ~ _ _ _ _ _ _ _ _ _ e Listed categories (attach statement) ~ _ _ _ _ _ _ _.f General limitation Deductions allocated and apportioned at partner level 9 Interest expense ~ _ _ _ _ _ _ _ _ _ _ _ h Other... Deductions allocated and apportioned at partnership level to foreign source income i Passive ~ _ _ _ _ _ _ _ j Listed categories (attach statement) ~ _ _ _ _ _ _ _ _ kGenerallimitation. ~ I Foreign taxes: (1) Paid ~ _ _ _ _ _ _ _ _ _ _ _ (2) Accrued. m Reduction in taxes available for credit (attach statement). . 17 a Post. 1986 depreciation adjustment. . . . . . . . . . . . . . . . . . . . b Adjusted gain or loss. . . . . . . . . . . . . c Depletion (other than oil and gas). . . . . . . . d Oil, gas, and geothermal properties - gross income. . . e Oil, gas, and geothermal properties - deductions f Other AMT items (attach stmt) . 18a Tax-exempt interest income...... b Other tax-exempt income. c Nondeductible expenses. 19 a Distributions of cash and marketable securities. b Distributions of other property. 20 a Investment income. . b Investment expenses. c Other items and amounts '~I . 9c PTP A0l34L 01/05/05 Pa e 3 60,872. 171. -21,429. 10 11 12 13a 13b 13c 13d (2) 13e 14a 14b 14c 15 a 15b 15c 15d 15e 15f 16 k 161 (2) 16m 17a 17b 17 c 17d 17e 171 18a 18b 18c 19 a 19 b 20a 20b -69. 34,000. 171. Form 1065 (2004) Form 1065 (2004) SUSQUEHANNA _.LLEY PARTNERS 23-2713531 Analysis of Net Income (Loss) Page 4 1 Net Income (loss). Combine Schedule K, lines 1 through 11. From the result, subtract the sum of . .1 I Schedule K, lines 12 throuQh 13e, 161(1), and 161(2)........................................... 1 39,614. 2 Analys is by (i) Corporate (ii) Individual (iii) Individual (iv) Partnership (v) Exempt (vi) Nominee/Other partner type: (active) (passive) organization a General 9,807. partners. . . b ~~~I~~~s . 27,454. 2,353. uired if Question 5 of Schedule B is answered 'Yes.' Beginning of tax year End of tax year (a) (b) 41,855. 1 Cash............ . . . . . . . . . . 2a Trade notes and accounts receivable. . . b Less allowance for bad debts. . 3 Inventories........... 4 U.S. government obligations. . . . . . . . . . . 5 Tax-exempt securities... ............ 6 Other current assets (attachstmt).... .sEE. ST. .1. 7 Mortgage and real estate loans. 8 Other investments (attach stmt). . . . . .SEE. ST. .2. 9a Buildings and other depreciable assets. . . . . . b Less accumulated depreciation. lOa Depletable assets. . . . . b Less accumulated depletion. . 11 Land (net of any amortization). . . . 12a Intangible assets (amortizable only). b Less accumulated amortization. . . . 2, 652. 13 Other assets (attach stmt).... .SEE. .ST 3 .::::::::................:......:::::....................... /:/mi':)ii)Iii:::{,{):\,/{::::::/\\\6 14 Total assets. . . .. .ili/.lilili,'li!.II.ll.:.::::!::.lj'iii/lli:lll.1,,'i'..i/:'!!':!iii.'!li.i!I'ill!!::.. Liabilities and Capital 15 Accounts payable. . . . . . . . . . . . . . . . . . . . . 16 Mortgages, notes, bonds payable in less than 1 year. . . . 17 Other curren I liabilities (attach stmt). . .SEE. ST. .4. 18 All nonrecourse loans. . . . . . . . . . . . . . . . . . . 19 Mortgages, notes, bonds payable in 1 year or more. . . . . 20 other liabilities (attach stmt). . . . . . . . . . 21 Partners' capital accounts. . . . . 22 Total liabilities and capital. . . . . . . . . . . . . . . . . . :iSth~::WU~HYli4J Reconciliation of Income Loss) er Books With Income (Loss) er Return 1 Net income (loss) per books. . . . . . . 39, 614 . 6 Income recorded on books this year not 2 Income included on Schedule K, lines 1, included on Schedule K, lines 1 through 2, 3c, 5, 6a, 7, 8, 9a, 10, and 11, not 11 (itemize): recorded on books this year (itemize): a Tax-exempt interest.. $ 4,354. 7,159. 16,155. 714,988. 107,066. 845,368. 3 Guaranteed pmts (other than health insurance). . . . 4 Expenses recorded on books this year not included on Schedu Ie K, lines 1 through 13e, 161( 1), and 161(2) (itemize): a Depreciation. . b T ravel and entertainment. $ $ 7 Deductions included on Schedule K, lines 1 through 13e, 161(1), and 161(2), not charged a~lainst book income thiS year (itemize): a DepreCiation .... $_ _ _ _ _ _ _ _ _ _ _ 5 Add lines 1 throu h 4. . . . . . . . . . . . $m,ijaijbFM~Z: Anal sis of Partners' Ca 1 Balance at beginning of year. . . . . . . . . . . . 2 Capital contributed: a Cash. . b Property. 3 Net income (loss) per books 4 Other increases (itemize): 39,614. ital Accounts 101,452. 8 Add lines 6 and 7. . . . . . . 9 Income (loss) (Analysis of Net Income (Loss), line 1). Subtract line 8 from line 5. . . 39,614. 6 Distributions: a Cash. . . b Property. 7 Other decreases (itemize): 34,000. 39,614. 5 Add lines 1 throu h 4. . . 8 Add lines 6 and 7. . 141,066. 9 Balance at end of year. Subtract line 8 from line 5. PTP AO 134L 01/05105 34,000. 107,066. Farm 1065 (2004) Schedule 0 OMS No. 1545-0099 (Form 1065) Capital Gains and Losses 2004 Department of the Treasury Internal Revenue Service ~ Attach to Form 1065. lame of partnership I ~;:;e~i~e~t~i;a~on number SUSQUEHANNA VALLEY PARTNERS ml1ian:m>:f:1 Short-Term Capital Gains and Losses - Assets Held 1 Year or Less (a) Descrlpllon of property (b) Date acquired (c) Date sold (d) Sales price (e) Cost or other basis (f) Gain or (loss) (e.g., 100 shares of 'Z' Co) (month, day, year) (month, day, year) (see instructions) (see instructions) Subtract (e) from (d) 1 2 Short-term capital gain from Installment sales from Form 6252, line 26 or 37. ... . ,.. , , , . . . . .,... , .".. . 2 3 Short-term capital gain (loss) from like-kind exchanges from Form 8824 . .. . ........ , .... . .... . ,...... . .. . 3 4 Partnership's share of net short-term capital gain (loss), including specially allocated short-term capital gains (losses), from other partnerships, estates, and trusts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 5 ~~~~~~I~-~~r~n~1~~lllain or (1.055).. .COrnbi~~ lines. 1. throu.gh 4. In cO.lumn (f). . Ent~r here and on. F arm. 1 06.5,. . 5 1::e~n.We>)1 Lonq-Term Capital Gains and Losses - Assets Held More Than 1 Year (a) Description of property (b) Date acquired (C) Date sold (d) Sales price (e) Cost or other basis (f) Gain or (loss) (e.g., 100 shares of 'Z' Co) (month, day, year) (month, day, year) (see instructions) (see instructions) Subtract (e) from (d) 6 SALE OF WATER COMPANY VARIOUS VARIOUS 44,390. 65,819. -21,429. 7 Long-term capital gain from installment sales from Form 6252, line 26 or 37. ". . .. . . . . . . . . . . .., . ... . .... . 7 8 Long-term capital gain (loss) from like-kind exchanges from Form 8824. . . . .... . . . . . . , . . . . . . , . , , . , . . . . . . . , , 8 9 Partnership's share of net long-term capital gain (loss), Including specially allocated long-term capital gains (losses), from other partnerships, estates, and trusts. . . . .... .... .. ......... . .. . ... . . 9 10 Capital gain distributions. ..,.....,.. . ............ . ... . .,.. . .". . , . . . . . . . . , , . . , . . ..",."..... . ... . 10 11 ~~;~~~T~tK.~i~:~i~a~(~i,n or(loSS)..~o~bi.ne line.s 6. :hro.ugh .10 In .colu~n (f).. Enter here. and on Form .10.65, . 11 -21,429. BAA For Privacy Act and Paperwork Reduction Act Notice, see instructions for Form 1065. Schedule D (Form 1065) 2004 PTPA0201L 07116/04 OMB No. 1545.0172 Form 4562 Depreciation and Amortization (Including Information on Listed Property) ~ See separate instructions. ~ Attach to your tax return. Department of the Tre~sury 1ternal Revenue ServIce 4ame(s) shown on return 2004 67 SUSQUEHANNA VALLEY PARTNERS Business or activity to whIch thIS form relates Identifying number 23-2713531 FORM 8825, RENTAL REAL ESTATE - PARK AND TOWNHOUSE RENTAL 1J1irtJ::'r~/1 Election To Expense Certain PropertY' Under Section 179 Note: If you have any listed property, complete Part V before you complete Part I. 1 Maximum amount. See instructions for a higher limit for certain businesses. 1 2 Total cost of section 179 property placed in service (see instructions). . . 2 3 Threshold cost of section 179 property before reduction in limitation. 3 4 Reduction in limitation. Subtract line 3 from line 2. If zero or less, enter -0-. . . 4 5 Dollar limitation for tax year. Subtract line 4 from line 1. If zero or less, enter -0-. If married filing se aratel , see Instructions. . . . . . . . . . . . . . . . . . . . . . . 5 6 (a) Description of p,operty (b) Cost (business use only) C Elected cost $102,000. $410,000. 7 listed property. Enter the amount from line 29. . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 8 Total elected cost of section 179 property. Add amounts in column (c), lines 6 and 7. 8 9 Tentative deduction. Enter the smaller of line 5 or line 8 . . . . . . . . . . 9 10 Carryover of disallowed deduction from line 13 of your 2003 Form 4562. . . 10 11 Business Income limitation. Enter the smaller of business income (not less than zero) or line 5 (see instrs). . 11 12 Section 179 expense deduction. Add lines 9 and 10, but do not enter more than line 11. . . . 12 13 Carryover of disallowed deduction to 2005. Add lines 9 and 10, less line 12.. ~[lLJ Note: Do not use Part II or Part "' below for listed property. Instead, use Part V. I'PaH'lr"1 S . I 0 . f All d Oth 0 . f (0 d I t d ...... ....,,, ..;.;.:.;.:.: pecla eprecla IOn owance an er eprecla IOn o not Inclu e IS e propertv.) 14 Special depreciation allowance for qualified property (other than listed property) placed in service during the tax year (see instructions). . . , . . , . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . . , . . . . , . . , . . . . . . . . . , . . . , . . . . , . , . , . . 14 15 Property subject to section 168(f)(1) election (see instructions). ......,.. , ,........ . ..... . .... . , . . , . . . .., , 15 16 Other depreciation (including ACRS) (see instructions). . . . , . . .. . .... . .. , ...... . .. . . . , . , . . ... . . . . . . " . 16 64,505. 1::fN~"t,u'irl MACRS Depreciation (Do not include listed property.) (See instructions) Section A ~~ ;;;:;:;:~g~:;:~~i:::':~:~:~~ili~:';;;t:::::~:,~,:,~;;:g'::::;C:~~'i"g~, ,,,y,,, in'~31... Section B - Assets Placed in Service During 2004 Tax Year Using the General Depredation System (a) (b) Month and (C) Basis for depreciation (d) (e) (f) (g) Dep,eciation Classification of property year placed (businesslinvestment use Recovery period Convention Method deduction in service only - see instructions) 19 a 3-year property, b 5-year property. . c 7-year property. d 10-year property. . e 15-year property. , . . f 20-year property. . . . g 25-year property. h Residential rental property. . . Nonresidential real property. . 25 27.5 27.5 39 MM MM MM MM S/L S/L S/L S/L S/L 20 a Class life. . b 12-year. c 40- ear. . e~mnv// Summa (see instructions) : ;~;t~l;~~~~jHf;~i~~~::i~i.~~::i~~~i~;'~~;:::~:~:~: '::,:, E"'et h''':" '" · · · · · .~ll.ili! BAA For Paperwork Reduction Act Notice, see separate instructions. FDIZ0812L 09/30104 Form 4562 (2004) Section C - Assets Placed in Service During 2004 Tax Year Using the Alternative Depreciation System ~~~: MM i:~ I Form 4562 (2004) susQur JNA VALLEY PARTNERS 23-2713531 Page 2 IJ1\aa~\tm:UI Listed Property (Include aLaumobiles, certain other vehicles, cellular telephones, v-ortain computers, and property used for entertainment, recreation, or amusement.) Note: For any vehicle for which you are using the standard mileage rate or deducting lease expense, complete only 24a, 24b, columns (a) through (c) of Section A, all of Section B, and Section C If applicable. Section A - De reciation and Other Information (Caution: See Instructions for limits for assen er automobiles) 24a Do you have evidence to support the business/investment use claimed? . Yes No 24b If 'Yes,' is the eVidence written? (a) (b) (c) (d) (e) (f) (,g) Type of property (list Date placed i~~:~7~~S~t Cost or Basis for depreciation Recovery Method/ vehicles fIrst) In service use other basis (businesslinvestment period Convention percentage use only) No (h) (i) Elected section 1 79 cost Depreciation deduction 25 Special depreciation allowance for qualified listed property placed in service during the tax year and used more than 50% in a qualified business use (see instructions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 Pmp"" ""d roc' 'hoe 50% i" '"'Ii"'1 b",'"'' "" ("'I ,,,',uoli,,,) 27 Pmp"" ""d r' oc ",,', ,!,"'lifi'd b"j"''''"'' (", '''i'"Oli''')' 25 B ~ 28 Add amounts in column (h), lines 25 through 27. Enter here and on line 21, page 1 . . . . . . 28 29 Add amounts in column (i), line 26. Enter here and on line 7, page 1.... .. ................. Section 8 - Information on Use of Vehicles Complete this section for vehicles used by a sole proprietor, partner, or other 'more than 5% owner,' or rel21ted person. If you prOVided vehicles to your employees, first answer the questions in Section C to see if you meet an exception to completing this section for those vehicles. (a) (b) (c) (d) (e) (f) 30 Total business/investment miles driven Vehicle 1 Vehicle 2 Vehicle 3 Vehicle 4 Vehicle 5 Vehicle 6 during the year (do not include commuting miles - see instructions). . . . . . ,.. . .... . .. . 31 Total commuting miles driven during the year. . ".... . 32 Total other personal (noncommuting) miles driven....... ,.., . ... ,.. ... . .. . 33 Total miles driven during the year. Add lines 30 through 32. . . . . . . . ........., . .... . Yes No Yes No Yes No Yes No Yes No Yes No 34 Was the vehicle available for personal use during off -duty hours? . . ...... . ...,.. . ,.. . 35 Was the vehicle used primarily by a more than 5% owner or related person? . . . . . . ,.. . 36 Is another vehicle available for personal use? . . .. . .. . , . . . . . . ,...,. . , . . . . Section C - Questions for Employers Who Provide Vehicles for Use by Their Employees Answer these questions to determine if you meet an exception to completing Section B for vehicles used by employees who are not more than 5% owners or related persons (see instructions). '37 Do you maintain a written policy statement that prohibits all personal use of vehicles, including commuting, by your employees? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 Do you maintain a written policy statement that prohibits personal use of vehicles, except commuting, by your employees? See instructions for vehicles used by corporate officers, directors, or 1 % or more owners. . . . . . . . 39 Do you treat all use of vehicles by employees as personal use?. ....................... ............. 40 Do you provide more than five vehicles to your employees, obtain information from your employees atlout the use of the vehicles, and retain the information received? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 Do you meet the requirements concerning qualified automobile demonstration use? (see instructions). Note: If your answer to 37, 38, 39, 40, or 41 is 'Yes,' do not complete Section B for the covered vehicles. eaffMI Amortization (a) (b) (c) (d) (e) (f) Yes No Description of costs Date amortization begins Amortizable amount Code section Amortization period or percentage Amortization for this year 42 Amortization of costs that begins during your 2004 tax year (see instructions): I I ...~ ......... 44 43 Amortization of costs that began before your 2004 tax year. . 44 Total. Add amounts in column (t). See instructions for where to report. FDIZ0812L 09/30/04 833. 833. Form 4562 (2004) 'eparlmenl of the Treasury 'iternal Revenue Service Rental Real Estate Income and Expenses of a Partnership or an S Corporation ~ See instructions. ~ Attach to Form 1065, Form 1065-B, or Form 11205. OMS No. 1545-1186 Form 8825 2004 Name Employer identification number SUSQUEHANNA VALLEY PARTNERS 23-2713531 1 Show the kind and location of each property. See page 2 for additional properties. A PARK AND TOWNHOUSE RENTAL -SELfNSGR-OVE,-PA -- - - - - -- - -- --- - - - -- - - -- - -- - -- - - - - - - -- -- - -- - -- - -- -- - - -- B ----------------------------------------------------------------- c _________________________________________________________________ o ----------------------------------------------------------------- Properties Rental Real Estate Income A B c o 2 Gross rents. . . _ . . . . _ . . . . . . . . . . Rental Real Estate Expenses 3 Advertising...... 4 Auto and travel. _ . 5 Cleaning and maintenance _ . . . . 6 Commissions....... 7 Insurance... 8 Legal and other professional fees. 9 Interest.... 10 Repairs 11 Taxes.. 12 Utilities. 13 Wages and salaries. . . . . . . . . . . . 14 Depreciation (see instructions). . . . 15 Other (list) ~ _ _ _ _ _ _ _ _ _ _ __ SEE STATEMENT 5 2 181,496. 3 4 5 6 7 8 9 10 11 12 13 14 7,620. 4,052. 4,263. 25,756. 2,878. 757. 64,668. 10,630. 15 16 Total expenses for each property. Add lines 3 through 15. . . . . . . . . . . . . . 16 120, 624 . 17 Total gross rents. Add gross rents from line 2, columns A through H . . . . . . . . . _ . . . . . . . . . . . . . . . . . . . . . 17 18 Total expenses. Add total expenses from line 16, columns A through H..... ... .. . ..... .. . . .... ..... . . 18 19 Net gain (loss) from Form 4797, Part II, line 17, from the disposition of property from rental real estate activities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 19 20 a Net income (loss) from rental real estate activities from partnerships, estates, and trusts in which thiS partnership or S corporation is a partner or beneficiary (from Schedule K-1). . . . . . . . . b Identify below the partnerships, estates, or trusts from which net income (loss) is shown on line 20a. Attach a schedule if more space is needed: (1) Name (2) Employer Identification number 181,496. -120,624. 20a 21 Net rental real estate income (loss). Combine lines 17 through 20a. Enter the result here and on: . Form 10650r1120S: Schedule K, line 2, or . Form 1065-8: Part I, line 4 lAA For Paperwork Reduction Act Notice, see the separate instructions. J- Form 8825 (2004) SPSZ010lL 10/22/04 n Final K-1 II, ",Iendecl K-l OMS No. 1545-0099 Schedule K-1 2004 IdlllattHllmt! Partner's Share IOf Current Year Income, (F orm 1065) Deductions, Credits, and Other Items f1epartment of the Tre~sury T ax year beginning ,2004 1 Ordinary business Income (loss) 15 Credits & credit recapture ternal Revenue Service and ending ,20 - - -------------- Partner's Share of Income, Deductions, 2 Net rental real estate income (loss) * 4,821.. Credits, etc. ~ See separate instructions. 3 Other net rental income (loss) 16 Foreign transactions I'JtijrlJ(\d Information About the Partnership - -------------- 4 Guaranteed payments A Partnership's employer identification number - -------------- 23-2713531 5 Interest income B Partnership's name, address, city, state, and ZIP code 14" - -------------- 6a Ordinary dividends SUSQUEHANNA VALLEY PARTNERS - -------------- P.O. BOX 151 6b Qualified dividends ELIZABETHTOWN PA 17022 - -------------- C IRS Center where partnership filed return 7 Royalties CINCINNAtI, OH - -------------- D Check if this is a publicly traded partnership (PTP) 8 Net short-term capital gain (loss) - E Tax shelter registration number, if any - F Check if Form 8271 is attached 9a Net long-term capital gain (loss) 17 Alternative minimum tax (AMT) items - -1,697" A -5. - -------------- 1::,:e~dJrt:::l Information About the Partner 9b Collectibles (28%) gain (loss) - -------------- G Partner's identifying number 9c Unrecaptured section 1250 gain 184-12-4759 H Partner's name, address, city, state, and ZIP code 10 Net section 1231 gain (loss) 18 Tax-exempt income and nondeductible expenses M. GRACE WALTER 11 Other income (loss) - -------------- R. D. #4, BOX 175 - ---------------- NEWVILLE, PA 17241 o General partner or LLC [K] Limited partner or other - -------------- I -- member-manager LLC member ---------------- J [K] Domestic partner o Foreign partner 19 Distributions 12 Section 179 deduction A __ _ _ _ _ __ _j!...O_Oil:.. K What type of entity is this partner? INDIVIDUAL 13 Other deductions L Partner's share of profit, loss, and capital: 20 Other information Beginning Ending -- ---------------- Profit 7.92 9.,- 7.92 9.,- A 14. 0 0 ---------------- -------------- Loss 7.92 % 7.92 9.,- 0 Capital 7.92 9.,- 7.92 9.,- 0 0 - -------------- 14 Self-employment earnings (loss) M Partner's share of liabilities at year end: '-- ---------------- - -------------- Nonrecourse. . . . . . . . . , . ,..,.. . . . .... . $ Qualified nonrecourse financing. .... . .$ Recourse. . ...... , "..,..... . .. . . . . . . $ *See attached schedule for additional information. N Partner's capital account analysis: F 0 Beginning capital account. . . . . . .. . ... , $ -2,063. R Capital contributed during the year. .. . $ I R Current year increase (decrease) .. . .. . $ 3,138. 5 Withdrawals and distributions. ..., . $ ( 4,000. ) U 5 Ending capital account. . . . .......... , $ -2,925. E 0 I DGAAP o Section 704(b) book N ~Tax basis L y Other (explain) BAA For Paperwork Reduction Act Notice, see Instructions for Form 1065. PARTNER 27 PTPA0312L 01/05/05 Schedule K-1 (Farm 1065) 2004 SUSQUEHANNA VALLEY PARTNERS _3-2713531 SCHEDULE K-l (FORM 1065) 2004 SUPPLEMENTAL INFORMATION I BOX2 RENTAL REAL ESTATE ACTIVITIES PROPERTY GROSS DESCRIPTION INCOME PARK AND TOWNHOUSE RENTAL NET EXPENSES NET INCOME 14,374. 9,553. $ TOTAL $ 4,821. PASSIVE 4,821. I PARTNER 27: M. GRACE WALTER 184-12-4759 SPSL1201L 07/31/03 PA,GE 2 PASSIVE SEC. 1231 NONPASS TOTAL STATEMENT 1 FORM 1065, SCHEDULE L, LINE 6 OTHER CURRENT ASSETS PREPAID EXPENSES.. BEGINNING ENDING ........... $ 5,003. $ 4,354. TOTAL ~ 5,003. $ 4,354. STATEMENT 2 FORM 1065, SCHEDULE L, LINE 8 OTHER INVESTMENTS PENNSVIEW WATER COMPANy..... BEGINNING ....... $ 50,000. $ TOTAL ~ 50,000. $ ENDING o. o. STATEMENT 3 FORM 1065, SCHEDULE L, LINE 13 OTHER ASSETS SYNDICATION COSTS. BEGINNING .... $ 75,492. $ TOTAL ~ 75,492. $ ENDING 75,492. 75,492. STATEMENT 4 FORM 1065, SCHEDULE L, LINE 17 OTHER CURRENT LIABILITIES PREPAID RENTS........ SECURITY DEPOSITS.. BEGINNING ........... $ 6,760. $ 8,375. TOTAL ~ 15,135. $ ENDING 5,565. 10,590. 16,155. STATEMENT 5 FORM 8825, LINE 15 OTHER EXPENSES PROPERTY A: PARK AND TOWNHOUSE RENTAL - SELINSGROVE, PA PROPERTY B: - PROPERTY C: - PROPERTY D: - PROPERTY A PROPERTY B PROPERTY C PROPERTY D AMORTIZATION.. ................ $ MANAGEMENT FEES........ 'W..rl'r:"'<;'~. - ~'f'3 REAL Pl'\OPERTY.. .,' V^.u.o~J:,U ID;aD TELEPHONE................ 833. 1,100. 7,682. 3. STATEMENT 5 (CONTINUED) FORM 8825, LINE 15 OTHER EXPENSES PROPERTY A: PARK AND TOWNHOUSE RENTAL - SELINSGROVE, PA PROPERTY B: - PROPERTY C: - PROPERTY D: - PROPERTY A PROPERTY B PROPERTY C PROPERTY D OFFICE EXPENSE..... POSTAGE. . . $ 427. 585. 10,630. . . TOTAL $ U.S. Return of Partnership Income F or calendar year 2003, or tax year beginning , 2003, and ending , 20 ~ See se arate instructions. OMS No.1545.0099 Form 1 065 2003 Jepartment of the Treasury .'1ternal Revenue Service A Principal business activity 8 Principal product or service D Employer identification number RENTAL Use the IRS label. Other- wise, print or type. F Total assets (see instrs) SUSQUEHANNA VALLEY PARTNERS P.O. BOX 151 ELIZABETHTOWN, PA 17022 23-2713531 E Date business started PARK 6/02/1993 C Business code number 531110 $ 996,068. G Check applicable boxes: (1) Initial return (2) Final return (3) Name change (4) Address change (5) 0 Amended return H Check accounting method: (1) Cash (2) X Accrual (3) Other (specify). . . .. ~ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ I Number of Schedules K-l. Attach one for each person who was a partner at any time during the tax year. . . . . . . . . . . . . . ~ 34 Caution: Include only trade or business Income and expenses on lines 7a through 22 below. See the instruci'lOns for more information. S E E I N S T R D u E c T D , U 0 N C s T I F 0 0 R N S L , M , T A T I 0 N S Sign Here Paid Preparer's Use Only 1 a Gross receipts or sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b Less returns and allowances. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 a 1b 1c I N C o M E 2 Cost of goods sold (Schedule A, line 8) . . . . . . . . . . . . . . . . . . . . . . . . . 3 Gross profit. Subtract line 2 from line 1 c. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Ordinary income (loss) from other partnerships, estates, and trusts (attach schedule) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Net farm profit (loss) (attach Schedule F (Form 7040)). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Net gain (loss) from Form 4797, Part II, line 18. . . 2 3 4 5 6 7 Other income (loss) (attach schedule). . . . . . . . . . . . . . . . . . 7 8 Total income (loss). Combine lines 3 through 7. . . . . . . . . 8 9 Salaries and wages (other than to partners) (less employment credits) . . . . 9 10 Guaranteed payments to partners. . . . . . . . . . . . . . . . . . . . 10 11 Repairs and maintenance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 12 Bad debts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 13 Rent......................................................................................... 13 14 Taxes and licenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 15 Interest............................ . . . . . . . . . . . . . . . . . . . . . . . 15 16a Depreciation (if required, attach Form 4562).......................... I}iial b Less depreciation reported on Schedule A and elsewhere on return. . . .. [iliJ 16c 17 Depletion (Do not deduct oil and gas depletion.) . . . . . . . . . . . . 17 18 Retirement plans, etc. . . ... . . . . . . . . . . . . . . . . . . . . . . . 18 19 Employee benefit programs. ......... .......... 19 20 Other deductions (attach schedule) . . . . . . 20 21 Total deductions. Add the amounts shown in the far right column for lines 9 through 20. . . 21 22 Ordinary income (loss) from trade or bUSiness activities. Subtract line 21 from line 8. . . . . . . 22 Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and statements, and to the best of my knowledge and belief, it is true, correct, and complete. Declaration of preparer (other than general partner or limited liability company member) is based on all information of which preparer has any knowledge. ~ ~ May the IRS discuss this return WIth the prefarer shown below (see instrs). X Yes Preparer's SSN or PTIN ,q~ - /"lG. -~?0 Signature of genera! partner or limited liability company member P.reparer's sIgnature EIN ~ 23-2003867 Phone no. (717) 3 67- 93 96 Form 1065 (2003) Date No Date 1/28/04 Check if self. ~ employed. . . . Firm's name (or yours if self-employed), ~ address, and ZIP code BAA For Paperwork Reduction Act Notice, see separate instructions. PTPA0105L 08125103 Form 1065 (2003) SUSQUEHANNA VA ,Y PARTNERS 23-2713531 1::S#,ijijij:jlhWAU ::4 Cost of Goods Sold (see instructions) Page 2 1 Inventory at beginning of year. 1 2 Purchases less cost of items withdrawn for personal use. . . . . 2 3 Cost of labor. . . . . . . 3 4 Addllional section 263A costs (attach schedule) . .. . . . 4 5 Other costs (attach schedule) . .. . . . . . . . . . 5 6 Total. Add lines 1 through 5. . . . . . . . . . . . . 6 7 Inventory at end of year. . . . . . . . 7 8 Cost of goods sold. Subtract line 7 from line 6. Enter here and on page 1, line 2. .. . . . . . . . . . 8 9a Check all methods used for valuing closing inventory: (i) ~ Cost as described In Regulations section 1.471-3 (ii) Lower of cost or market as described In Regulations section 1.471-4 (iii) Other (specify method used and attach explanation) .. ...... .. ~ b Check this box if there was a writedown of 'subnormal' goods as described in Reg~l~i;-n~ ~e;-ti-;;n-1~471-:-2~)~.~.~ - -: ~ ~ ~ ~ - ~-~- - - - c Check this box if the LIFO inventory method was adopted this tax year for any goods (if checked, attach Form 970). . . . . .. ~ d Do the rules of section 263A (for property produced or acquired for resale) apply to the partnership? . 0 Yes No e Was there any change in determining quantities, cost, or valuations between opening and closing inventory? 0 Yes No If 'Yes', attach explanation. . 1::$$lj"!l#~ttlttU4 Other Information 1 What type of entity is filing this return? Check the applicable box: a ~ Domestic general partnership b ~ Domestic limited partnership c Domestic limited liability company d Domestic limited liability partnership e Foreign partnership f Other . ~ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ 2 Are any partners in this partnership also partnerships? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . X 3 DUring the partnership's tax year, did the partnership own any interest in another partnership or in any foreign entity that was disregarded as an entity separate from its owner under Regulations sections 301.7701-2 and 301.7701-3? If yes, see instructions for required attachment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . X 4 Is this partnership subject to the consolidated audit procedures of sections 6221 through 6233? If 'Yes,' see Designation of Tax Matters Partner below. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. ........................... 5 Does this partnership meet all three of the following requirements? a The partnership's total receipts for the tax year were less than $250,000; b The partnership's total assets at the end of the tax year were less than $600,000; and c Schedules K-1 are filed with the return and furnished to the partners on or before the due date (including extensions) for the partnership return. If 'Yes,' the partnership is not required to complete Schedules L, M-l, and M-2; Item F on page 1 of Form 1065; or Item J on Schedule K-1. . .. ................................................................... X 6 Does this partnership have any foreign partners? If 'Yes,' the partnership may have to file Forms 8804, 8805 and 8813. See instructions. . . . . . . . X 7 Is this partnership a publicly traded partnership as defined in section 469(k)(2)? . . . . . . . . . . . . . X 8 Has this partnership filed, or is it required to file, Form 8264, Application for Registration of a Tax Shelter? . . . . . . X 9 At any time during calendar year 2003, did the partnership have an interest In or a signature or other authority over a financial account in a foreign country (such as a bank account, securities account, or other financial account)? See the instructions for exceptions and filing requirements for Form TO F 90-22.1. If 'Yes,' enter the name of the foreign country. ~ X ------------------------------------------------ 10 During the tax year, did the partnership receive a distribution from, or was it the grantor of, or transferor to, a foreign trust? If 'Yes,' the partnership may have to file Form 3520. See instructions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . X 11 Was there a distribution of property or a transfer (e.g., by sale or death) of a partnership interest durin~J the tax year? If 'Yes,' you may elect to adjust the basis of the partnership's assets under section 754 by attaching the statement described in the instructions under Elections Made By the Partnership. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . X 12 Enter the number of Forms 8865, Return of U.S. Persons With Respect to Certain Foreign Partnerships, attached to this return . ~ 0 Designation of Tax Matters Partner (see instructions) ~nter below the general partner designated as the tax matters partner (TMP) for the tax year of this return: l\jame of designated TMP ~ RONALD L. FELTY Address of 113 S. MARKET ST. designatedTMP ~ ELIZABETHTOWN, PA 17022 Identifying number ofTMP ~ 164-38-3404 PTPAOl12L 08/25/03 Form 1065 (2003) Form 1065 (2003 SUSQUEHAN: TALLEY PARTNERS 23-2713531 ::$tiH~dQlim=f(::: Partners' Shares OT Income, Credits, Deductions, etc (a) Distributive share items Ordinary income (loss) from trade or business activities (page 1, line 22). 2 Net income (loss) from rental real estate activities (attach Form 8825) . . . . , . . , 3a Gross income from other rental activities. , . . . . . , . . . . , . . , , . . , . . . . ~ b Expenses from other rental activities (attach sch) , . . . . . . , . . . . . . , , . . . . . . . . . , ~ c Net income (loss) from other rental activities. Subtract line 3b from line 3a. . , 4 Portfolio income (loss) (attach Schedule 0 (Form 1065) for lines 4d and 4e:. . . . . . . . a Interest income, , . , . . . . . . , . , . . , . . . . . . . , . . . . . . . . . . . . , , . , . . . . . . . . . . . . . , . . . , . , . . , b Dividends: (1) Qualified dividends. ~ _ _ _ _ _ _ _ _ _ _ _ (2) Total ordinary dividends ~. c Royalty income. . . . . . . . . . . . , . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . d Net short-term capital gain (loss):. (1) post-May 5, 2003. . . ~ _ _ _ _ _ _ _ _ _ _ _ (2) Entire yea[ .. ~. e Net long-term capital gain (loss): (1) post-May 5,2003, .. ~ _ _ _ _ _ _ _ _ _ _ _ (2) Entire year . ~. I Other portfolio income (loss) (attach schedule)...,...,....... , .., " , ,. ".... 5 Guaranteed payments to partners. . . , . . ' . , . . . . . . . 6a Net section 1231 gain (loss) (post-May 5, 2003) (attach Form 4797). . ' . , . . b Net section 1231 gain (loss) (entire year) (attach Form 4797) . , . . . . . . . . . . 7 Other income (loss) . . . . . . . . . . . . . . . . . . . . , , . . . . , . , . . . . . . . . . . . . , . . . . . . . . . . . , , , . . , . . . . , 8 Charitable contributions (attach schedule) . . , . . . , . . . . . . . . . . . 9 Section 179 expense deduction (attach Form 4562). . . . , 10 Deductions related to portfolio income (itemize) , . . , . . . . . . . . . .. .....,.... 11 Other deductions. . . . . . , . . . , . . . . . , . . . . .. ........,.,...,........., , , . . . . . . . . . , 12a Low-income housing credit: (1) From partnerships to which section 420)(5) applies. . . . (2) Other than on line 12a(1). . . . . . . . . . . . , . . . . . . . . . , .. . . . . , . . . . . . . . . . . . . . , . . , . . . . . . . . b Qualified rehabilitation expenditures related to rental real estate activities (attach Form 3468). . . . , . . , . . . . . c Credits (other than credits shown on lines 12a and 12b) related to rental real estate activities. . , . . . . . . . , . . d Credits related to other rental activities. . . . . . . . . . . . . . . , . . . . . . . . . . , . . . . . . ' . . . , 13 Other credits, . . . . . . . , . . . . . . . , . . . , . . . . . . . . . . . . . , . . . . . , . . . . . . . . , . . , , . . . . . . . . . . . 14a Interest expense on investment debts. . . . . . . . . . . . . . . , . . . . , . . . . , . . . . . . , . . . . . , . . , b (1) Investment income included on lines 4a, 4b (2) , 4c, and 4f above. . . . . , . , . , . . . . . . . (2) Investment expenses included on line 10 above, . . . . . . . . . . . . . . ' . . . , . . . . , . . . . . . . . 15a Net earnings (loss) from self-employment. . . . . . . . .. . . . . . . , . . . . . , . . . . . . , . . . . . , , . b Gross farming or fishing income, . . . . . . . . . , . . . . . . . . . . . . , . . . . . . . . . . . . . . . , . . . . . . c Gross nonfarm income, . . . , , . . . . . . . . . . . , . . . . .. ...,.,.............., 16 a Depreciation adjustment on property placed in service after 1986, . . . . . . . . , , . . . . . . . . b Adjusted gain or loss, . . . . . . . . . , ' . . . . . . . , ' . . , . . . . . . , . . . . , . . . , . . . , . . . . . . . . . ' , . , . . . , . , c Depletion (other than oil and gas), , . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . , . . . d (1) Gross income from oil, gas, and geothermal properties. . . . . . . . . . . . . . . . '........,. (2) Deductions allocable to oil, gas, and geothermal properties. . . . . . . . . . . . , . . . . . . . . . . . . . e Other adjmnts & tax pref items. . . . . . , . . . . . . . , . . . . . . . . . . . , . , . . . , . . . . . , . . . , , . . , , , , . . . , . . . . 17 a Name of foreign country or U.S, possession. . . . .. ~ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ b Gross income from all sources. . . . . . . . . . , . . . . . . . . . . . . . . . . .. ...,........, c Gross income sourced at partner level. . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . , . . . , . . . . . , , . . . . , . . , . . d Foreign gross income sourced at partnership level: (1) Passive ~ (2) Listed categories (attach sch) ~ e Deductions allocated and apportioned at partner level: (1) Interest expense ~ (2)Other. , . . . . . . . . , . . . . . . . . . . . . . . . , . , . I Deductions allocated and apportioned at partnership level to foreign source income: (1) Passive ~ (2) Listed categories (attach sch) .. (3) General limitation ~ g Total foreign taxes (check one): ~ 0 Paid D Accrued. . . , . , . . . , . h Reduction in taxes available for credit (attach schedule). . , , . , . . . . . . 18 Section 59(e)(2) expenditures: a Type. ~ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ b Amount . ~ 19 Tax-exempt interest income...,........ .......,......,...,...... .....".,... 20 Other tax-exempt income. . ' . . . . . . . . . , 21 Nondeductible expenses. , . . . . . . . . . . . 22 Distributions of money (cash and marketable securities), 23 Distributions of property other than money. 24 Other items and amounts required to be reported separately to partners (attach schedule), . . . . . , . , . , . , . , . . , . . . , . . . , . . . . . . . . , Income (Loss) Deduc- tions Credits Invest- 'llent nterest Sell- Employ- ment Adjust- ments and Tax Preler- ence Items Foreign Taxes Other BAA (3)Generallimitation ~ PTP A0l34L 12/26/03 Page 3 51,813. 4a 4b 2 4c 4 d (2) 4e 2 4f 5 6a 6b 7 8 9 10 11 12 a (1) 12a (2) 12b 12c 12d 13 14a 14 b (1 ) 14 b (2) 15a 15b 15c 16a 16b 16c 16d (1) 16d (2 16e 13,038. 13,038. 268. -118. ~ 17 I (3) 17g 17h 18b 19 20 21 22 23 34,000. ..............................."...... .;.;.;.;.:.;.;.;.;.;.;.;.;.;.;.:.;.;.;.;.:.;.:.:.:.;.:';':';.;.;.:.;.;.:.:.;. !:~:~:;:~:~:~:~:;:}~{:~:;:~r:;:~:};:;:~:;:~;~:~:;:;:r;:;:~:;:; ii~;tn:;i;;:~~;;::;~~;;i;;;;~;;:i~;;:i:;:~:;:;:;:;:;r:::::::::::::::: ...."..........., ................. .....,...,'.....'.........'.... .. ::::::::::/;~ Form 1065 (2003) Form 1065 (2003) SUSQUEHANNA Analysis of Net Income (Loss) EY PARTNERS 23-2713531 Page 4 1 Net income (loss). Combine Schedule K, lines 1 through 7 in column (b). From the result, subtract the I I sum of Schedule K, lines 8 through 11, 14a, 17g, and 18b. .... , ... . .. . . . ....... . ... . ............ 1 65,119. 2 Analysis by (i) Corporate (Ii) Individual (iii) Individual (iv) Partnership (v) Exempt (vi) NomineelOther partner type: (active) (passive) organization a General 16,125. partners. , .. b Limited 45,126. 3,868. Dartners . Note: Schedules L, M- 1 and M-2 are not re uired if Question 5 of Schedule B is answered 'Yes.' St.ib~H::lXmKC::titt Balance Sheets er Books Beginning of tax year Assets (a) (b) 1 Cash . . . . . . . . . . 28, 921 . 2a Trade notes and accounts receivable. . . b Less allowance for bad debts. . . . . . . . . . . . . . . 3 Inventories................. . . . . . . . . . 4 U.S. government obligations. . 5 Tax-exempt securities. . . . . . . . . . . . . . . . . 6 Other current assets (attach schedule). .SEE. ST. .1. 7 Mortgage and real estate loans. . . . . . . . . . . 8 Other investments (attach schedule) . . .SEE . ST. .2. 9a Buildings and other depreciable assets. . . . . . b Less accumulated depreciation. . 10 a Depletable assets. . . . . b Less accumulated depletion. . . . . 11 Land (net of any amortization). . . . . . . . . 12a Intangible assets (amortizable only). . . . . b Less accumulated amortization. . . . . . . . . . . . . 13 Other assets (attach schedule) .SEE. ST. .3. 14 Total assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Liabilities and Capital 15 Accounts payable. . . . . . . . . . . . . . . . . . . 16 Mortgages, notes, bonds payable in less than 1 year. . . . 17 Other current liabilities (attach sch) . . .SEE. ST. .4. 18 All nonrecourse loans. . . . . . . . . . . . . . . 19 Mortgages, notes, bonds payable in 1 year or more. . . . . 20 Other liabilities (attach schedule) . . . . . . . . . . . . . . . . . 21 Partners' capital accounts. . . . . . . . . . . . . . . . . . 22 Total liabilities and capital. . . . . . . . . . . . . . . . . ::Sem~(Hde:::MfM: Reconciliation of Income 1 Net income (loss) per books. . . . . . . . , . . . 2 Income included on Schedule K, lines 1 through 4, 6b, and 7, not recorded on books this year (itemize): 3 Guaranteed pmts (other than health insurance). . . . . 4 Expenses recorded on books this year not included on Schedule K, lines 1 through IT, 14a, 17g, and 18b (itemize): a Depreciation. , . . .. $_ _ _ _ _ _ _ _ _ _ _ b Travel and entertainment. . . .. $ 5 Add lines 1 throu h 4. . , . . , :$tlb~!::l#Ji:6lYHZ::: Anal sis of Partners' Ca 1 Balance at beginning of year. . . 2 Capital contributed: a Cash. b Property. . . 3 Net Income (loss) per books. . . . . . . . . . , 4 other Increases (itemize): 5 Add lines 1 through 4. . - - 8,521. 5,003. 50,000. 50,000. 975,144. 615,210. 975,144. 679,989. 3,485. 75,492. Loss) er Books With Income (Loss er Heturn 65,119. 6 Income recorded on books this year not included on Schedule K, lines 1 though 7 (itemize): a Tax-exempt interest.. $ 6,473. 15,135. 873,008. 101,452. 996,068. 7 Deductions included on Schedule K, lines 1 through 11, 14a, 17g, and 18b, not charged against book income this year (itemize): a Depreciation. . . .. $_ _ _ _ _ _ _ _ _ _ _ 65,119. ita I Accounts 70,333. 8 Add lines 6 and 7. . . . . . . . 9 Income (loss) (Analysis of Net Income (Loss), line 1). Subtract line 8 from line 5. , . . . 65,119. 65,119. 6 Distributions: a Cash. . . . . . . . . . . b Property. . 7 Other decreases (itemize): _ _ _ _ _ _ _ _ _ _ _ 34,000. 135,452. 8 Add lines 6 and 7. . . . . . , 9 Balance at end of year. Subtract line 8 from line 5. 34,000. 101,452. PTPA0134L 12/26103 Form 1 065 (2003) Form 4562 Depreciation and Amortization (Including Information on Listed Property) ... See separate instructions. ... Attach to your tax return. OMS No. 1545.0172 Department of the Treasury Internal Revenue Service 2003 67 ,ame(s) shown on return SUSQUEHANNA VALLEY PARTNERS Identifying number 23-2713531 Business or activity to which this form relates FORM 8825, RENTAL REAL ESTATE - PARK AND TOWNHOUSE RENTAL IPiMd?)?1 Election To Expense Certain Property Under Section 179 Note: If you have any listed property, complete Part V before you complete Part I. 1 MaXimum amount. See instructions for a higher limit for certain businesses. . . . . . . 2 Total cost of section 179 property placed in service (see instructions). . 3 Threshold cost of section 179 property before reduction in limitation............. ... ... 4 Reduction In limitation. Subtract line 3 from line 2. If zero or less, enter -0-. . . . . . . . . . . . . . . . . . . . . . . . 5 Dollar limitation for tax year. Subtract line 4 from line 1. If zero or less, enter -0-. If married filing se aratel , see instructions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $100,000. 1 2 3 4 $400,000. 6 5 a Description of property b Cost (business use only) C Elected cost 7 Listed property. Enter the amount from line 29............ ......... 7 8 Total elected cost of section 179 property. Add amounts in column (c), lines 6 and 7. 8 9 Tentative deduction. Enter the smaller of line 5 or line 8 . . . . 9 10 Carryover of disallowed deduction from line 13 of your 2002 Form 4562......... 10 11 Business income limitation. Enter the smaller of business income (not less than zero) or line 5 (see instrs). 11 12 Section 179 expense deduction. Add lines 9 and 10, but do not enter more than line 11. . . . . . . . 12 13 Carryover of disallowed deduction to 2004. Add lines 9 and 10, less line 12. . . . . . .. ~~I Note: Do not use Part liar Part III below for listed property. Instead, use Part V. Ifr..fflr....j S . I D . f All d Oth D . f " ,.Jt .. ...... pecla eprecla Ion owance an er eprecla IOn (Do not include listed property.) ....... .. .. 14 Special depreciation allowance for qualified property (other than listed property) placed in service during the tax year (see instructions). . . . . ..........,.....,. . ................ . ..." . ",. . . . ,........ , .... . 14 15 Property subject to section 168(f)(1) election (see instructions). . . . . . . . . . . . . ......,. . ... . .. . .... . .,. . .. . 15 16 Other depreciation (including ACRS) (see instructions). . . . . . . . . . ....,.. . ,......,.. . . . . . . . ........ . .., . 16 64,505. IJM6?Illlll MACRS Depreciation (Do not include listed property.) (See instructions) Section A ~; ;~~:;o';:~;~;;::~i:~;:~~E:~~~I~~~:;~~,~:~~:::;:I~'~:;;~~::::,~,~O~~'IC9 .~~ to< ,eo' lct'-:ll."-?I Section B - Assets Placed in Service During 2003 Tax Year Using the General Depreciation System (a) (b) Month and (C) Basis for depreciation (d) (e) (I) (g) Depreciation Classification of property year placed (busmessilnvestment use Recovery period Convention Method deduction in service only - see instructions) 19a 3-year property.. b 5- ear property. . . . . c 7- ear property. . . . . . d lO-year property. . . . . . . e 15- year propert .. 1 20-year property. . . . . . . . . g 25-year property. . . . . . . . . h Residential rental property. . . . . . . . . . . . Nonresidential real property. . . . . . . . . . 25 27.5 27.5 39 MM MM MM MM S/L S/L S/L S/L S/L Section C - Assets Placed in Service During 2003 Tax Year Using the Alternative Depreciation System .......... ~~~: MM m! li\adJMl~ Summa (see instructions) 21 Listed property. Enter amount from line 28. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 22 Total. Add amounts from line 12, lines 14 through 17, lines 19 and 20 in column (g), and line 21. Enter here and on the appropriate lines of your return. Partnerships and S corporations - see instructions. . . . . . . . . . . . 22 23 For assets shown above and placed in service during the current year, enter the portion of the basis attributable to section 263A costs. . . . . . . . . . . . . . . . . . 23 BAA For Paperwork Reduction Act Notice, see instructions. FDIZ0812L 10/28103 Form 4562 (2003) Form 4562 (2003) SUSQUEI JA VALLEY PARTNERS 23-2713531 Page 2 IJN~'rl.:::M:nn:1 Listed Property (Include automobiles, certain other vehicles, cellular telephones, certain computers, and property used for entertainment, recreation, or amusement.) Note: For any vehicle for which you are using the standard mileage rate or deducting lease expense, complete only 24a, 24b, columns (a) through (c) of Section A, all of Section B, and Section C if applicable. Section A - De reciation and Other Information Caution: See instructions for limits for assen er automobiles) 24a Do you have evidence to support the business/investment use claimed? . . Yes No 24b If 'Yes,' is the evidence written? (a) (b) (c) (d) (e) (f) (g) Type of. property (list Date placed Bus~7~~~t Cost or Basis for depreciation Recovery Method/ vehrcles first) in service rnveuse other basis (business/investment period Convention percentage use only) No (h) (i) Elected section 179 cost Depreciation deduction 25 Special depreciation allowance for qualified listed property placed in service during the tax year and used more than 50% in a qualified business use (see instructions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 26 Pmp"ty ","d I'"~ ,"eo 50% i"' '"'lil>'[ b",i",,,"," 1'"'1 i",tr"cl>O"')' B 2J Propert used 50% or less in a qualified business use (see instructions): 28 Add amounts in column (h), lines 25 through 27. Enter here and on line 21, page 1........... "., 28 29 Add amounts in column (i), line 26, Enter here and on line 7, page 1 , , , , , , ' , , ' , , , , , , , , , . , , , , , . , , . Section B - Information on Use of Vehicles Complete this section for vehicles used by a sole proprietor, partner, or other 'more than 5% owner,' or related person. If you provided vehicles to your employees, first answer the questions in Section C to see if you meet an exception to completing this section for those vehicles. (a) (b) (c) (d) (e) (f) 30 Total business/investment miles driven Vehicle 1 Vehicle 2 Vehicle 3 Vehicle 4 Vehicle 5 Vehicle 6 during the year (do not include commuting miles - see instructions). , , , , . , , , , , , , , , , , . 31 Total commuting miles driven during the year, , , , , ' , , , 32 Total other personal (noncommuting) miles driven, , . , , , , . , , , , . , . , . . , . , . . . . . . . . . 33 Total miles driven during the year, Add lines 30 through 32, , , , , , , , , , . . , , . . . . . . . . ' , Yes No Yes No Yes No Yes No Yes No Yes No 34 Was the vehicle available for personal use during off-duty hours? , , , , , , , . , , , , . . . . , , , . , 35 Was the vehicle used primarily by a more than 5% owner or related person? , , . . . . . . . . 36 Is another vehicle available for personal use? . , . . , . , , . , ".. . .".....,... . Section C - Questions for Employers Who Provide Vehicles for Use by Their Employees Answer these questions to determine if you meet an exception to completing Section B for vehicles used by employees who are not more than 5% owners or related persons (see instructions). 37 Do you maintain a written policy statement that prohibits all personal use of vehicles, including commuting, by your employees? . . , , . , . , , , , . . , . . , , . . . , . . , , , , , . , , . . , . , . , , , . . . , , . , . , , . , , , . . . . . . . . , , . 38 Do you maintain a written policy statement that prohibits personal use of vehicles, except commuting, by your employees? See instructions for vehicles used by corporate officers, directors, or 1 % or more owners, 39 Do you treat all use of vehicles by employees as personal use?",."...,.,... """""'" 40 Do you provide more than five vehicles to your employees, obtain information from your employees about the use of the vehicles, and retain the Information received? . . , . . , , . , . , , , , , , . . , . , , , , . , , , , . . . . , . , 41 Do you meet the requirements concerning qualified automobile demonstration use? (see instructions). , , , . Note: If your answer to 37, 38, 39, 40, or 47 is 'Yes,' do not complete Section B for the covered vehicles, :aijffVf:m: Amortization 00 ~ W ~ w ro Yes No Description of costs Date amortization begins Amortizable amount Code section Amortization period or percentage Amortization for this year 42 Amortization of costs that begins during your 2003 tax year (see instructions): I I ......~ ",,,.,,. 44 43 Amortization of costs that began before your 2003 tax year. , 44 Total. Add amounts in column (I). See instructions for where to report, . FDIZ0812L 10/28103 833. 833. Form 4562 (2003) Form 4797 Sales of Business Property (Also Involuntary Conversions and Recapture Amounts Under Sections 179 and 2BOF(bX2)) ~ Attach to your tax return. ~ See separate instructions. OMB No, 1545-0184 SUSQUEHANNA VALLEY PARTNERS 2003 27 )epartment of the Treasury nternal Revenue Service (99) Name(s) shown on return 1 Enter the gross proceeds from sales or exchanges reported to you for 2003 on Form(s) 1099-8 or 1099-S (or substitute statement) that you are including on line 2, 10, or 20 (see instructions), "," """, 1 33,500. 1]!~6.:'}rJm Sales or Exchanges of Property Used in a Trade or Business and Involuntary Conversions From Other Than Casualty or Theft - Most Property Held More Than 1 Year (See instructions.) 2 (e) Depreciation (I) Cost or other (g) Gain or (loss) (a) Description (b) Date acquired (C) Date sold (d) Gross allowed or basis, plus for entire year 01 property (month, day, year) (month, day, year) sales price allowable since improvements and Subtract (f) from the acquisition expense of sale sum of (d) and (e) (h) Post-May 5, 2003, gain or (loss)" (see below) 3 Gain, if any, from Form 4684-, line 39, . , , - , , , , , , , , , , , , , , , , , , ' , , , , , , , , , 4 Section 1231 gain from installment sales from Form 6252, line 26 or 37, , 5 Section 1231 gain or (loss) from like-kind exchanges from Form 8824 , , , 6 Gain, if any, from line 32, from other than casualty or theft. . . , . - . , , , , ' , , , , , , , , , 7 Combine lines 2 through 6 in columns (g) and (h). Enter the gain or (loss) here and on the appropriate line as follows. . . . . . . , . . . , . . . , , . . . . . . . . . . . . . , . . . . . . ' . , . , . . , . . . . . . , . . . . . . . ' Partnerships (except electing large partnerships) and S corporations. Report the gain or (loss) following the instructions for Form 1065, Schedule K, line 6, or Form 1120S, Schedule K, line 5. Skip lines 8, 9, 11, and 12 below. :3 4 !; () 13,038. 13,038. 7 13,038. All others. If line 7, column (g) is zero or a loss, enter that amount on line 11 below and skip lines 8, 9, and 12. If line 7, column (g) is a gain and you did not have any prior year section 1231 losses, or they were recaptured in an earlier year, enter the gain or (loss) in each column as a long-term capital gain or (loss) on Schedule D and skip lines 8, 9, 11, and 12 below. 8 Nonrecaptured net section 1231 losses from prior years (see instructions). . . _ . . . . . . . . . . . . . . . . . a 9 Subtract line 8 from line 7. If line 9, column (g) is zero or less, enter -0- in column (g). If line 9, column (g) is zero, enter the gain from line 7, column (g) on line 12 below. If line 9, column (g), is more tllan zero, enter the amount from line 8, column (~) on line 12 below and include the rsa~~ ?~sllr~~1?o~s)a~h. c~l,umn. of line. ~. ~~.a ,Iong~terlll.cap,. ~I. ~.ain .or (Io.ss:. on ,~~h:d.~I~ ,~. . , . . . 91 "Corporations (other than S corporations) should not complete column (h). Partnerships and S corporations must complete column (h), All others must complete column (h) only if line 7, column (g), IS a gain and the amount, if any, on line 8, column (g), does not equal or exceed the gain on line 7, column (g). Include in column (11) all gains and losses from column (g) Irom sales, exchanges, or conversions (including installment payments received) after May 5, 2003, However, do not include gain attributable to umecaptured section 1250 gain. l'Aan'lf\II Ordinary Gains and Losses 10 Ordinary gains and losses not included on lines 11 through 17 (include property held 1 year or less): 1 1 Loss, if any, from line 7 , column (g). 1 1 1 2 Gain, if any, from line 7 , column (g) , or amount from line 8, column (g), if applicable. 1 2 1 3 Gain, if any, from line 3 1 1 3 1 4 Net gain or (loss) from Form 4684, lines 3 1 and 38a 1 4 1 5 Ordinary gain from installment sales from Form 6252, line 25 or 36. 1 5 1 6 Ordinary gain or (loss) from like -kind exchanges from Form 8824 1 6 1 7 Recapture of section 1 79 expense deduction for partners and S corporation shareholders for property dispositions from 2002-2003 fiscal year partnerships and S corporations (see instructions). 1 7 1 8 Combine lines 10 through 1 7. Enter the gain or (loss) here and on the appropriate line as tollows, 1 B For all individual returns. Enter the (loss) from line 1 8 the return being filed. :;::::;::;::;;:;:;:;::;::::::";:::::":" :.:':;::::::;:;::::::: .... .. a except gain or on ",' '... b For individual returns: (1) If the loss on line 1 1 includes a loss from Form 4684, I ine 35, column (b) (Ii) , enter that part of the loss here Enter the part of the loss from income. producing property on Schedule A (Form 1040), line 27 , and the part of the loss from property used as an 18b (lJ I_'wm~ employee on Schedule A (F arm 1 040), line 22. Identify as from 'F arm 4797, I ine 1 8b( 1 ). , See instructions. (2) Redetermine the gain or (loss) on line 1 8 excluding the loss, if any, on line 1 8b(1 ) Enter here and on Form 1040, line 14. ._ 1 B b (~) I lil!il!!i!!!!!II!i!II!!il!!!!!!!!!!!!!!!II!II!I!!!!!i!!!illlill BAA For Paperwork Reduction Act Notice, see instructions. FDIZ1001L 12102/03 Form 4797 (2003) Form 4797 (2003) SUSQUEHANNA VALDEY PARTNERS 23-2713531 Page 2 liMalHttill Gain From Disoosition of ProoertVUnder Sections 1245. 1250 1252 1254, and 1255 .. . 19(a) Description of section 1245, 1250, 1252, 1254, or 1255 property: (b>cpate acqu~)ed 1C) Date so!~ mo, day,yr mo, dav, vr A LAND - LOT #5 6/02/93 11/03/03 B c 0 These columns relate to the properties on lines Property A 19A throuah 19D. . ..,........ . ~ Property B Property C Property D . . ....",. . .., . 20 Gross sales price fote: See Ime 7 before completing. ............... .. . 20 33,500. 21 Cost or other basis plus expense of sale. . . . . . . . 21 20,462. 22 Depreciation (or depletion) allowed or allowable. . 22 23 Adjusted basis. Subtract line 22 from line 21 . . . . 23 20,462. 24 Total gain. Subtract line 23 from line 20 . . . . . . 24 13,038. 25 If section 1245 property: a Depreciation allowed or allowable from line 22. . 25a b Enter the smaller of line 24 or 25a. . . . . 25b 26 If section 1250 property: If straight line depreciation was used, enter -0- on line 26g, except for a corporation subject to section 291. a Additional depreciation after 1975 (see instrs) . . . 26a b Amicable percentage multiplied by the smaller 26b o ine 24 or line 26a (see instructions) . . . . . . . . c Subtract line 26a from line 24. If residential rental property or line 24 IS not more than line 26a, 26c skip lines 26d and 26e. . . . . . .. . , . . . . . . . . . . d Additional depreciation after 1969 & before 1976. . 26d e Enter the smaller of line 26c or 26d. . . . 26e f Section 291 amount (corporations only). . . . '" . 26f 9 Add lines 26b, 26e, and 26f. . . .. . ,.. . 26g O. 27 If section 1252 properl Skip this section if you did not dispose of farm and or if this form is being completed for a partnership (other than an electing large partnership). a Soil, water, and land clearing expenses. . . . . . . . 27a b Line 27a multiplied by aFiPlicable 27b percentage (see instruc ions). . . . . . . . . . c Enter the smaller of line 24 or 27b. ". . 27c 28 If section 1254 property: a Intangible drilling and development costs, expenditures for development of mines and other natural deposits, and mining exploration costs (see instructions). . . . . . . . . . . . . . . . . . . . . . . . 28a b Enter the smaller of line 24 or 28a. . . . . 28b 29 If section 1255 property: a Applicable percentage of payments excluded from income under section 126 (see instructions). . . """ . 29a b Enter the smaller of line 24 or 29a (see instrs). 29b Summary of Part III Gains. Complete property columns A throuqh D throuqh line 29b before qoinq to line 30 30 Total gains for all properties. Add property columns A through D, line 24. ..... , . . ... . .. . ..., . .. . .. . ... . 30 13,038. 31 Add property columns A through D, lines 25b, 26g, 27c, 28b, and 29b. Enter here and on line 13 . . . . . . . ...".. , .. . . . 31 O. 32 Subtract line 31 from line 30. Enter the portion from casualty or theft on Form 4684, line 33. Enter the portion from other than casualty or theft on Form 4797, line 6, column (g), and if applicable, column (h). . . . . . .....".. . ... . .... , 32 13,038. .. ...... ..., ... IBart:::!M~:/:[ Recapture Amounts Under Sections 179 and 280F(b)(2) When Business Use Drops to 50% or Less (See Instructions.) (a) Sedion 179 (bJ Section 2 OF(bX2) 33 Section 179 expense deduction or depreciation allowable in prior years. .. . ,... , ,.., . 33 34 Recomputed depreciation. See instructions. ..... . ...,.... . .. . ".. . ......". . .. . 34 35 Recapture amount. Subtract line 34 from line 33. See instructions for where to report. . . ....., . .,. . 35 BAA FDIZ1002L 08113/03 Form 4797 (2003) Form 8825 Rental Real Estate Income and Expenses of al Partnership or an S Corporation OMS No. 1545-1186 Jepartment of the Treasury nternal Revenue Service ~ 5ee instructions. ~ Attach to Form 1065, Form 1065-B, or Form 11205. 2003 Name Employer identification number SUSQUEHANNA VALLEY PARTNERS 23-2713531 1 Show the kind and location of each property. See page 2 for additional properties. A PARK AND TOWNHOUSE RENTAL SELI~GROVE:PA------------------------------------------------ B ----------------------___________________________________ c _________________________________________________________________ D ------------------------_________________________________________ Properties Rental Real Estate Income A B c D 2 Gross rents. . . . . . . . . . . . . . . . . 2 Rental Real Estate Expenses 3 Advertising.. ......... . . . . . . . . . . 3 4 Auto and travel. . . . . . . . . . . . . 4 5 Cleaning and maintenance. . . . 5 6 Commissions............ 6 7 Insurance........................... 7 8 Legal and other professional fees. . . . . . 8 9 Interest.. 9 10 Repairs. . . . . . . . . . . . " ......... 10 11 Taxes... ......... 11 12 Utilities.................. . . . . . . . . . 12 13 Wages and salaries. . . . . . . . . . 13 14 Depreciation (see instructions). . . . . . . . . 14 15 Other (list) ~ _ _ _ _ _ _ _ _ _ _ _ _ SEE STATEMENT 5 180,635. 7,934. 4,179. 4,376. 30,995. 4 981. 7,449. 20. 64,779. 4,109. 15 16 Total expenses for each property. Add lines 3 through 15. . . . . . . . . . . . . . . . 16 128 , 822 . 17 Total gross rents. Add gross rents from line 2, columns A through H . . . 18 Total expenses. Add total expenses from line 16, columns A through H. . . 19 Net gain (loss) from Form 4797, Part II, line 18, from the disposition of property from rental real estate activities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 17 18 180,635. -128,822. 19 20 a Net income (loss) from rental real estate activities from partnerships, estates, and trusts in which this partnership or S corporation is a partner or beneficiary (from Schedule K-l). . . . . . . . . . . . . . . . . . . . . . . b Identify below the partnerships, estates, or trusts from which net income (loss) is shown on line 20a. Attach a schedule if more space is needed: (1) Name (2) Employer identification number 20a 21 Net income (loss) from rental real estate activities. Combine lines 17 through 20a. Enter the result here and on: J- · Form 1065 or 11205: Schedule K, line 2, or · Form 1065-B: Part I, line 4 BAA For Paperwork Reduction Act Notice, see the separate instructions. Form 8825 (2003) SPSZ01 01 L 10/21/03 Schedule K.' (Form 1065) OMS No, 1545-0099 Partne. _ Share of Income, Credits, Deduc.....ms, etc 2003 Department of the Treasury Internal Revenue ServIce be innin 184-12-4759 . 20 number ~ 23-2713531 Partnership's name, address, and ZIP code Partner's identif in number ~ Partner's name, address, and ZIP code M. GRACE WALTER R. D. #4, BOX 175 NEWVILLE, PA 17241 SUSQUEHANNA VALLEY PARTNERS P.O. BOX 151 ELIZABETHTOWN, PA 17022 ~ limited partner A This partner is a general partner D limited liability company member B What type of entity is this partner?, , , . ~ INDIVIDUAL C Is this partner a [2g domestic or a 0 fu~ign-p;rtr;;? - - - - - D Enter partner's % of: (i) Sefto,;r'in7~;t7g~ or (ii) E;~a~f Profit sharing. . _ _ _ _ _ _ _ _ _ _ % _ _ _ _ _ _ _l.J~ % Loss sharing.. ... _ _ _ _ _ _ _ _ _ _ % _ _ _ _ _ _ _l.J~ % Ownership of capital. - _ _ _ _ _ _ _ _ _ _ % _ _ _ _ _ _ _l. J ~ % E IRS Center where partnership filed return: CINCINNATI, OH J Analysis of partner's capital account: Income (Loss) Deduc- tions PARTNER 27 F Partner's share of liabilities (see instructions): Nonrecourse. . . . . , . _ , . . , , . . , $ Qualified nonrecourse financing, $ Other. . . . . . , , _ . . . . . . $ G Tax shelter registration number ~ H Check here if this partnership is a publicly traded partnership 0 as defined in section 469(k)(2) . . , _ . . , . . . , . _ . . , . . . . . , . . , . , , ' I Check applicable boxes: (l)-DFinal K-1 (2) DAmended K-1 (a) Capital account at beginning of year (b) Capital contributed during year (c) Partner's share of lines 3, 4, and 7, Form 1065, Schedule M-2 b Qualified rehabilitation expenditures related to rental real Credits estate activities. . . , . . . . , . . . c Credits (other than credits shown on lines 12a and 12b) related to rental real estate activities. . 12 c d Credits related to other rental activities. . , , , , , , , . , . , ' 12 d 13 Other credits. . . _ . . . _ _ . . . . , , , , , , . . . .' 13 BAA For Paperwork Reduction Act Notice, see Instructions for Form 1065. PTPA0312L 10/21/03 -3 221. (a) Distributive share item 1 Ordinary income (loss) from trade or business activities, 2 Net income (loss) from rental real estate activities. . , . . . , . , SEE. LINE, 25 3 Net income (loss) from other rental activities. 4 Portfolio income (loss): a Interest income _ . . . , . , . . . . . . . . , . . _ . . . . b (1) Qualified dividends, , . . . , . . . , . , , , . , . . . . . . , , , , . , . . (2) Total ordinary dividends, . . . , . . . , . . . . _, ,.........' c Royalty income. . . . . . , . , _ . . , . . . . . . . . . . . . . . . . . . . , , . d (1). Net short-term capital gain (loss) (post-May 5, 2003) . . , . , . . _ . . (2) Net short-term capital gain (loss) (entire year), , . . , , . , . . . . . , . , e (1) Net long-term capital gain (loss) (post-May 5, 2003), . , . . . _ . . . , (2) Net long-term capital gain (loss) (entire year). _ . _ . f Other portfolio income (loss) (attach schedule). . _ . , . . , . , . . . , . . . . 5 Guaranteed payments to partner. . _ , . . . . . . . . . . , 6a Net section 1231 gain (loss) (post-May 5, 2003). . . . . . . . . . . b Net section 1231 gain (loss) (entire year) . . . . . . . . . _ . . . . . . . . . , _ 7 Other income (loss) (attach schedule). . . _ , . . . , 8 Charitable contributions (see instructions) (attach schedule) , , . _ , _ , , , . . . . . . . , . 9 Section 179 expense deduction, . _.' "... ,.., _,.. . ,.,., ...,., ... 10 Deductions related to portfolio income (attach schedule). , , , . . . . . . . . . , 11 Other deductions (attach schedule) . . . . . _ . . _ , , . . 12a Low-income housing credit: (1) From section 42U)(5) partnerships. (2) Other than on line 12a(1). . (d) Withdrawals and (e) Capital account at end of distributions year (combine columns (a) through (d)) 5 158, 4 000. -2 063. (c) 1040 filers enter the amount in column (b) on: (b) Amount 1 2 3 4,104. See Partner's Instructions for Schedule K-] (Form 1065), 4a 4b(1 4b(2 4c 4d(1 4d(2 4e(1) 4e(2) 4f 5 6a 6b 7 8 9 10 11 21. Form 1040, line Sa Form 1040, line 9b Form 1040, line 9a Schedule E, Part I, line 4 Schedule 0, line 5, column (g) Schedule 0, line 5, column f) Schedule 0, line 12, column g) Schedule 0, line 12, column (f) 1,D33. 1,D33. See Partner's Instructions for Schedule K-l (Form 1065). Schedule A, line 15 or 16 See Partner's Instructions for Schedule K.1 (Form 1065), J- Form 8586, line 5 ] See Partner's Instructions tor Schedule K-1 (Form 1065), Schedule K-l (Farm 1065) 2003 Schedule K-l (Form 1065) 2003 SUSQUE Invest. ment Interest Self- employ- ment Adjust- ments and Tax Pref. erence Items Foreign Taxes Other 14a Interest expense on investment debts. . . . . . . b (1) Investment income included on lines 4a, 4b(2), 4c, and 4f. . . . . 2 Investment ex enses included on line 10. 15a Net earnings (loss) from self-employment. . . . b Gross farming or fishing income. . . . . . . . . . . . c Gross nonfarm income. . . . . . . . . . . . . . . . . . 16 a Depreciation adjustment on property placed in service after 1986 . . . . . b Adjusted gain or loss. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . c Depletion (other than oil and gas). . . . . . . . . . . . . . . . . . . . d (1) Gross Income from oil, gas, and geothermal properties. . (2) Deductions allocable to oil, gas, and geothermal properties. . . . . e Other adjustments and tax preference items (attach sch) . . . . . . . . . . . . . . 17 a Name of foreign country or U.S, possession.. ~ _ _ _ _ _ _ _ _ _ _ _ _ _ b Gross income from all sources. . . . . . . . . . . . . . . . . . . c Gross income sourced at partner level, . . , . . , . . . d Foreign gross income sourced at partnership level: (1) Passive, . . . . , .. ......,.........., (2) Listed categories (attach schedule). . . . . . . . . . . . . . , (3) General limitation. . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . , . . . . . . . e Deductions allocated and apportioned at partner level: (1) I nterest expense, . , , . . , . . . . . . . . . . . . . . . . . . . . . . (2) Other. . , , . . . . . , . . . . . . . . . . . . . . . . . . . . . . f Deductions allocated and apportioned at partnership level to foreign source income: (1) Passive. . . . . . . , . . . . . . . . . . , . , . . . . . . . . . . . . 17f(l) (2) Listed categories (attach schedule). . . 17f(2) (3) General limitation. . . . . . . . , . . . . . . . . . . . . . . . . . . 17f(3) 9 Total foreign taxes (check one): ~ 0 Paid o Accrued ., 17g h Reduction in taxes available for credit (attach schedule). , . . , . . . . . . . .. 17 h 18a Section 59(e)(2) expenditures: a Type ~ _ _ _ _ _ _ _ _ _ _ _ _ _ __ b Amount. . . . . . . . . . . . . . . . , . . . . . . . . . . . . .. ..........,.... 19 Tax-exempt interest income"........,..,................,. 20 Other tax-exempt income. , . . . . . . . . . . . . . . . . . . , . . . . . . 21 Nondeductible expenses. . . . . . . . . . . . . , . , . . . . . . . . . . . . . . 22 Distributions of money (cash and marketable securities). , 23 Distributions of property other than money. . . . . . . . . 24 Recapture of low-income housing credit: a From section 420)(5) partnerships. . . . . . . . . . . . . . . b Other than on line 24a. , . . . . . . , . . . , . . . . . . . . . 25 Supplemental information required to be reported separately to each partner (attach additIOnal schedules if more space is needed): NA VALLEY PARTNERS (a) Distributive share item LINE 2 RENTAL REAL ESTATE ACTIVITIES 23-271353. 17d(l) 17d(2) 17d(3) :::::::::::::::::::::::::::: ~:;;~:~:;:}t~:~:~;;:~; Supple- PROPERTY GROSS NET mental DESCRIPTION INCOME EXPENSES Infor- PARK AND TOWNHOUSE RENTAL mation 14,306. 10,203. $ ROUNDING TOTAL $ PARTNER 27: M. GRACE WALTER PTPA0312L 10/21/03 184-12-4759 (b) Amount NET INCOME Pa e 2 (c) 1040 filers enter the amount in column (b) on: Form 4952, line 1 21. J- See Partner's Instructions for Schedule K-l (Form 1065). Schedule SE, Section A or B See Partner's Instructions for Schedule K-1 (Form 1065), -9. See Partner's Instructions for Schedule K-1 (Form 1065) and Instructions for Form 6251. Form 1116, Part I Form 1116, Part II Form 1116, line 12. See Partner's Instructions for Schedule K-l (Form 1065). Form 1040, line 8b 4,000. See Partner's Instructions for Schedule K-l (Form 1065). Form 8611, line 8 PASSIVE NONPASS SEC. 1231 TOTAL 4,103. PASSIVE 1. 4,104. Schedule K-l (Form 1065) 2003 STATEMENT 1 FORM 1065, SCHEDULE L, LINE 6 OTHER CURRENT ASSETS ADVANCE, AFFILIATE.... PREPAID EXPENSES. BEGINNING .......... $ 4,000. $ . . . . . . . . . . 4, 52l. TOTAL ~ 8,521. $ STATEMENT 2 FORM 1065, SCHEDULE L, LINE 8 OTHER INVESTMENTS PENNSVIEW WATER COMPANy....................................... BEGINNING ........ $ 50,000. $ TOTAL S-- 50,000. $ STATEMENT 3 FORM 1065, SCHEDULE L, LINE 13 OTHER ASSETS SYNDICATION COSTS....................................... BEGINNING ...... $ 75,492. $ TOTAL $ 75,492. $ STATEMENT 4 FORM 1065, SCHEDULE L, LINE 17 OTHER CURRENT LIABILITIES BEGINNING PREPAID RENTS................................................................ ... $ 8,055. $ SECURITY DEPOSITS........................................ .......... .......... 8,545. TOTAL s- 16,600. $ STATEMENT 5 FORM 8825, LINE 15 OTHER EXPENSES PROPERTY A: PARK AND TOWNHOUSE RENTAL - SELINSGROVE, PA PROPERTY B: - PROPERTY C: - PROPERTY D: - ENDING O. 5,003. 5,003. ENDING 50,000. 50,000. ENDING 75,492. 75,492. ENDING 6,760. 8,375. 15,135. PROPERTY A PROPERTY B PROPERTY C PROPERTY D AMORTIZATION................ . LICENSES AND PERMITS.. .......... MANAGEMENT FEES.... OFFICE EXPENSE.. $ 833. 59. 2,100. 165. STATEMENT 5 (CONTINUED) FORM 8825, LINE 15 OTHER EXPENSES PROPERTY A: PARK AND TOWNHOUSE RENTAL - SELINSGROVE, PA PROPERTY B: - PROPERTY C: - PROPERTY D: - PROPERTY A PROPERTY B PROPERTY C PROPERTY D POSTAGE. . . . . . . . . . . . . . . . . . .. ................... $ TOTAL $ 952. 4,109. C Business code number Form 1 065 lTs~eR~t~;~s~tP;rt~~U;~hiip Income 2002 ~ See separate instructions. ~ or calendar year 2002, or tax year beginning , 2002, and ending A Principal business activity IRS use only -- Do not write or staple in this space. ,20 OMB No.1545.Q099 D Employer identification number RENTAL Use the IRS label. Other- wise, print or type. F Total assets (see instrs) SUSQUEHANNA VALLEY PARTNERS P.O. BOX 151 ELIZABETHTOWN, PA 17022 23-2713531 8 Principal product or service E Date business started PARK 6/02/1993 531110 $ 1,069,029. G Check applicable boxes: (1) Initial return (2) Final return (3) Name change (4) Address change (5) 0 Amended return H Check accounting method: (1) Cash (2) X Accrual (3) Other (specify). ~ __ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Number of Schedules K.l. Attach one for each person who was a partner at any time during the tax year. . . . . . ~ 32 Caution: Include only trade or business income and expenses on lines 7a through 22 below. See the instructions for more information. 5 E E I N D 5 T E R D u U C T C I T 0 I N 0 5 N F 5 0 R l I M I T A T I 0 N S Sign Here Paid Preparer's Use Only I N C o M E 1 a Gross receipts or sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , . . . . . . b Less returns and allowances. . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 c 1 a 1b 2 Cost of goods sold (Schedule A, line 8) . , . . 3 Gross profit. Subtract line 2 from line 1 c. . . , 4 2 3 Ordinary income (loss) from other partnerships, estates, and trusts (attach schedule), . . . . . . . . . . . . . . . . . . . . . . . . . , . 5 Net farm profit (loss) (attach Schedule F (Form 7040)). . . . . . , . . 6 Net gain (loss) from Form 4797, Part II, line 18.. ... . ..... 4 5 6 7 Other income (loss) (attach schedule) . . . . . 7 8 Total income (loss). Combine lines 3 through 7 . 8 9 Salaries and wages (other than to partners) (less employment credits) . . 10 Guaranteed payments to partners. . . . . . .. ......,........,............ 11 Repairs and maintenance. . . . . . . . . . . . . . . . . . , , . . . . . . . . . , . . . . . . . . , . , . . . . 12 Bad debts. . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . , . . . . , . . . . . . . . . . . , . . . . . . . . . . . . . . , . . . 13 Rent......,....................................,.........,................................... 14 Taxes and licenses. . . . . . . . . . , . . . . . . . . . . . . . . . , . , . . , . . . . . , , . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . . , 15 Interest................,..............,.. .......................... , . . . . . . . . . . , . . . , . . 16a Depreciation (if required, attach Form 4562).............,............ b Less depreciation reported on Schedule A and elsewhere on return. . . . . 17 Depletion (Do not deduct oil and gas depletion.) . . . . . . . . . . . . , 18 Retirement plans, etc. . . . . . . . . . . . . , , . . . . . . . . . . . 19 Employee benefit programs. . , . . . . . . . . . . . . 9 10 11 12 13 14 15 ~I 16b 16c 17 18 19 20 Other deductions (attach schedule) , . . . 20 21 Total deductions. Add the amounts shown in the far right column for lines 9 through 20. . 21 22 Ordinary income (loss) from trade or business activities. Subtract line 21 from line 8. . 22 Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and statemen'!s, and to the best of my knowledge and belief, it is true, correct, and complete. Declaration of preparer (other than general partner or limited liability company member) is based on all information of which preparer has any knowledge. ~ ~ May the IRS discuss this return With the preparer shown below (see instrs)? Date Date X Yes Preparer's SSN or PTIN \y(o- '\\Co-~ 5 No Preparer's signature 1/24/03 Check it self. ~ employed. Firm's name (or yours it self.employed), ~ address, and ZIP code EIN ~ 23-2003867 Phone no. (71 7) 3 67 - 9396 Form 1065 (2002) BAA For Paperwork Reduction Act Notice, see separate instructions. PTPA0105L 12/27/0;! Form 1065 (2002) SUSQUEHANNA VA~ I PARTNERS 23-2713531 1::$.#tlijq(ih~A::::j Cost of Goods Sold (see instructions) Page 2 1 Inventory at beginning of year. 1 2 Purchases less cost of items withdrawn for persona! use. 2 3 Cost of labor 3 4 Additional section 263A costs (attach schedule) 4 5 Other costs (attach schedule) 5 6 Total. Add lines 1 through 5. 6 7 Inventory at end of year. 7 8 Cost of goods sold. Subtract line 7 from line 6. Enter here and on page 1, line 2 8 9 a Check all methods used for valuing closing inventory: (I) ~ Cost as described In Regulations section 1.471.3 (ii) Lower of cost or market as described In Regulations section 1.471.4 (iii) Other (specify method used and attach explanation). . ......... ~ b Check this box If there was a writedown of 'subnormal' goods as described in Regulations section 1.471.2(c). . . . . . . . . ~ ~ c Check this box if the LIFO inventory method was adopted this tax year for any goods (if checked. attach Form 970). d Do Ih, 'u,,, 01 ,",lioc 263A (foe pcop,,\y pcoduced oe "qui", foe "",,) 'PP'Y I: ::P~'~:':h:~-------- -. -~ :y:ee-s: --NN~O- e Was there any change in determining quantities, cost, or valuations between opening and closing inventory? 0 If 'Yes', attach explanation. . W$$,H.#t.!m~@~:f::l Other Information 1 What type of entity is filing this return? Check the applicable box: a ~ Domestic general partnership b ~ Domestic limited partnership c Domestic limited liability company d Domestic limited liability partnership e Foreign partnership f Other. ~ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ 2 Are any partners in this partnership also partnerships? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 During the partnership's tax year, did the partnership own any interest in another partnership or in any foreign entity that was disregarded as an entity separate from its owner under Regulations sections 301.7701.2 and 301.7701.3? If yes, see instructions for required attachment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Is this partnership subject to the consolidated audit procedures of sections 6221 through 6233? If 'Yes,' see Designation of Tax Matters Partner below. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Does this partnership meet all three of the following requirements? a The partnership's total receipts for the tax year were less than $250,000; b The partnership's total assets at the end of the tax year were less than $600,000; and c Schedules K.l are filed With the return and furnished to the partners on or before the due date (including extensions) for the partnership return. If 'Yes,' the partnership is not required to complete Schedules L, M.1, and M.2; Item F on page 1 of Form 1065; or Item J on Schedule K.1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Does this partnership have any foreign partners? If 'Yes,' the partnership may have to file Forms 8804,8805 and 8813. See instructions. . . . . . . . . . . . . 7 Is this partnership a publicly traded partnership as defined in section 469(k)(2)? . . . . . . . . . . . . . . . . . . . . . . 8 Has thiS partnership filed, or is it required to file, Form 8264, Application for Registration of a Tax Shelter? 9 At any time during calendar year 2002, did the partnership have an interest in or a signature or other authority over a financial account In a foreign country (such as a bank account, securities account, or other financial account)? See the instructions for exceptions and filing requirements for Form TD F 90.22.1. If 'Yes,' enter the name of the fore ign country. ~ x x x x X X X ------------------------------------------------ X 10 During the tax year, did the partnership receive a distribution from, or was it the grantor of, or transferor to, a foreign trust? If 'Yes,' the partnership may have to file Form 3520. See instructions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. ........ X 11 Was there a distribution of property or a transfer (e.g., by sale or death) of a partnership interest durin~J the tax year? If 'Yes,' you may elect to adjust the basis of the partnership's assets under section 754 by attaching the statement described in the Instructions under Elections Made By the Partnership. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . X 12 Enter the number of Forms 8865, Return of U.S. Persons With Respect to Certain Foreign Partnerships, attached to this return. . . . . . . . . . ~ 0 Designation of Tax Matters Partner (see instructions) Enter below the general partner designated as the tax matters partner (TMP) for the tax year of this return: ,--Jame of designated TMP ~ Address of designated TMP ~ RONALD L. FELTY 113 S. MARKET ST. ELI ZABETHTOWN , PA 17022 Identifying number ofTMF) ~ 164 - 3 8 - 3 4 0 4 PTP AO 112L 12/27/02 Form 1065 (2002) Form 1065 (2002) SUSQUEHANl TALLEY PARTNERS 23-2713531 l$ph~di:d~:K 'itl Partners' Shares ot Income, Credits, Deductions, etc (a) Distributive share items 1 Ordinary income (loss) from trade or business activities (page 1, line 22). . . . . . 2 Net income (loss) from rental real estate activities (attach Form 8825) . . . . . 3a Gross income from other rental activities. . . . . . . . . . . . ~ b Expenses from other rental activities (attach sch) . .. ..... . . . . . . . . . . . ~ c Net income (loss) from other rental activities. Subtract line 3b from line 3a. 4 Portfolio income (loss): a Interest income. . . . . . . . . . . . . . b Ordinary dividends. . . . . . . . . . . . . . . . . . . . . . . . c Royalty income. .. ........................... . . . . . . . . . . . . . . . . . . . . . . . . . . d Net short-term capital gain (loss) (attach Schedule 0 (Form 7065)). e (1) Net long-term capital gain (loss) (attach Schedule 0 (Form ]065))..... (2) 28% rate gain (loss).. ~ _ _ _ _ _ _ _ _ _ _ _ (3) Qualified 5-year gain . ~ _ _ _ _ _ _ _ _ _ _ _ f Other portfolio income (loss) (attach schedule). . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Guaranteed payments to partners. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Net section 1231 gain (loss) (other than due to casualty or theft) (attach Form 4797) . . . 7 Other income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Charitable contributions (attach schedule) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Section 179 expense deduction (attach Form 4562). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Deductions related to portfolio income (itemize) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Other deductions. . . . . . . . . . . .. .............. 12a Low-income housing credit: (1) From partnerships to which section 420)(5) applies. . . (2) Other than on line 12a(1). . . . . . . . . . . . . . . . . . . . . . . . . . . b Qualified rehabilitation expenditures related to rental real estate activities (attach Form 3468). . . . . . c Credits (other than credits shown on lines 12a and 12b) related to rental real estate activities. . . . . d Credits related to other rental activities. . . . . . . . . . 13 Other credits. . . . . . . . . . . . . . . . . . . . 14a Interest expense on investment debts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b (1) Investment income included on lines 4a, 4b, 4c, and 4f above. . . . . . . . . . . . . . . . . . . (2) Investment ex enses included on line 10 above. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15a Net earnings (loss) from self-employment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b Gross farming or fishing income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . c Gross nonfarm income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 a Depreciation adjustment on property placed in service after 1986. . . . . . . . . . . b Adjusted gain or loss. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . c Depletion (other than oil and gas). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . d (1) Gross income from oil, gas, and geothermal properties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2) Deductions allocable to oil, gas, and geothermal properties. . . . . . . . . . . . . . . . . . . . . . e other adjmnts & tax pref items. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 a Name of foreign country or U.S. possession. . . . .. ~ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ b Gross income from all sources. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . c Gross income sourced at partner level. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . d Foreign gross income sourced at partnership level: (1) Passive ~ (2) Listed categories (attach sch) ~ e Deductions allocated and apportioned at partner level: (1) Interest expense ~ (2)Other. . f Deductions allocated and apportioned at partnership level to foreign source income: (1) Passive ~ (2) Listed categories (attach sch) ~ g Total foreign taxes (check one): ~ 0 Paid 0 Accrued. . h Reduction in taxes available for credit (attach schedule). . . . . . . . . . . . 18 Section 59(e)(2) expenditures: a Type. ~ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ b Amount. ~ 19 Tax-exempt Interest income. 20 Other tax-exempt income. . . . . 21 Nondeductible expenses. 22 Distributions of money (cash and marketable securities). . . . . . . . . . . . . 23 Distributions of property other than money. . . . . . . . . . . . . . . . 24 Other items and amounts required to be reported separately to partners (attach schedule) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Income (Loss) Deduc- tions Credits lVest. .lent Interest Self. Employ. ment Adjust- ments and Tax Prefer- ence Items Foreign Taxes "lther BAA (3) General I im itation ~ (3) General limitation ~ PTPA0134L 08/13/02 Page 3 (b) Total amount 20,224. 3c 4a 4b 4c 4d 4e (1) 1,031. 4f 5 6 7 8 9 10 11 12a 1 12a (2 12b 12c 12d 13 14a 14b 1) 14b (2 15a 15b 15c 16a 16b 16c 16d 1 16 d (2) 16e 1,031. -97. ~ 17 f (3) 17g 17h 18b 19 20 21 22 23 34,000. Form 1065 (2002) Form 1065 (2002) SUSQUEHANNA Analysis of Net Income (Loss) ~EY PARTNERS 23-2713531 Page 4 1 Net Income (loss). Combine Schedule K, lines 1 through 7 in column (b). From the result, subtract the I I sum of Schedule K, lines 8 through 11, 14a, 17g, and 18b. . . . . . . . . . . . . . . . . . . . . . . . . . . .. """"" 1 21,255. 2 Analysis by (i) Corporate (ii) Individual (iii) Individual (iv) Partnersh ip (v) Exempt (vi) Nominee/Other partner type: (active) (passive) organization a General 5,275. partners. b ~~~';,~s . 14,718. 1,262. Assets 1 Cash.................... . . . . . . . . . 2a Trade notes and accounts receivable. . . b Less allowance for bad debts. 3 Inventones................. 4 U.S, government obligations. 5 Tax-exempt securities......... 6 Other current assets (attach schedule). .SEE. ST. . I. 9, 074 . 7 Mortgage and real estate loans. . . . . . . . . . . . . 8 Other investments (attach schedule) . . .SEE. ST. .2. 9 a Buildings and other depreciable assets. . b Less accumulated depreciation. . . . . . . . . . . . . 10 a Depletable assets. . b Less accumulated depletion. . . . . . . . 11 Land (net of any amortization). . . . . . 12a Intangible assets (amortizable only). . b Less accumulated amortization. . . . . . 13 Other assets (attach schedule) .SEE. .ST. .3. 14 Total assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Liabilities and Capital 15 Accounts payable. . . . . . . . 16 Mortgages, notes, bonds payable in less than 1 year. . . . 17 Other current liabilities (attach sch) . . .SEE. ST. .4. 17, 410. 18 All nonrecourse loans. . . . . . . . . . . . . . . . . . . . . 19 Mortgages, notes, bonds payable in 1 year or more. . . . . 1, 080, 854 . 20 Oltier liabilities (attach schedule) . . . . . . . . . . . . . . . . . 21 Partners' capital accounts. . . . . . . . . . . . . . . . . . 22 Total liabilities and capital. . . . . . . . . . . . . iSohidUf~nv.Mj Reconciliation of Income (Loss) er Books With Income Loss) er Return 1 Net income (loss) per books. . . . . . . 21,255. 6 Income recorded on books this year not included 2 Income included on Schedule K, lines 1 through 4, on Schedule K, lines 1 though 7 (itemize): 6, and 7, not recorded on books this year (itemize): a Tax-exempt interest.. $ 3 Guaranteed pmts (other than health insurance). . . 4 Expenses recorded on books this year not included on Schedule K, lines 1 through IT, 14a, 17g, and 18b (itemize): a Depreciation. . $ b T ravel and entertainment. $ 5 Add lines 1 throu h 4. . . . . $eh~p4.h6Mk2.i Anal sis of Partners' Ca 1 Balance at beginning of year. . . . . . . . . . 2 Capital contributed: a Cash.. ......... b Property. . . . . . . . 3 Net income (loss) per books. . . . . . . . . . . . 4 Other increases (itemize): 5 Add lines 1 through 4. . 8,521. 16,600. 975,349. 70,333. 1,069,029. 7 Deductions included on Schedule K, lines 1 through 11, 14a, 17g, and 18b, not charged against book income this year (i tem ize): a Depreciation. . . .. $ 21,255. ital Accounts 83,078. 8 Add lines 6 and 7. . . . . .. .. 9 Income (loss) (Analysis of Net Income (Loss), line 1). Subtract line 8 from line 5. . . . . . 21,255. 6 Distributions: a Cash. . . b Property. . . . 7 Other decreases (itemize): 34,000. 21,255. 8 Add lines 6 and 7. . . . . . . . 104, 333 . 9 Balance at end of year. Subtract line 81rom line 5. . 34,000. 70,333. PTPA0134L 08/13/02 Form 1065 (2002) Form 4562 Jame(s) shown on return SUSQUEHANNA VALLEY PARTNERS Depreciation and Amortization (Including Information on Listed Property) ~ See separate instructions. ~ Attach to your tax return. OMS No. 1545.0172 Department of the Treasury Internal Revenue Service 2002 67 Business or activity to which this form relates Identifying number 23-2713531 FORM 8825, RENTAL REAL ESTATE - PARK AND TOWNHOUSE RENTAL 1:l?hrlti(\\W:jl Election To Expense Certain Tangible Property Under Section 179 Note: If you have any listed property, complete Part V before you complete Part I. 1 Maximum amount. See instructions for a higher limit for certain businesses. 2 Total cost of section 179 property placed in service (see instructions). . . . 3 Threshold cost of section 179 property before reduction in limitation. 4 Reduction in limitation. Subtract line 3 from line 2. If zero or less, enter .0-. . 5 Dollar limitation for tax year. Subtract line 4 from line 1. If zero or less, enter -0-. If married filing se aratel ,see Instructions, . . . . , , , , , , , , , , , , , , , . . 1 2 3 4 $24,000. $200,000. 5 6 (a) Description of property b Cos t (business use only) c) Elected cost 7 Listed property. Enter the amount from line 29. , , , , . . . . ' . , , , , , , . . . . . . , . . . . . , , 8 Total elected cost of section 179 property. Add amounts in column (c), lines 6 and 7, 9 Tentative deduction. Enter the smaller of line 5 or line 8 , . . , . . ' . , . . . , . , ' . . . . . . . ' . , . . . . . . . . , . . . . . . . 10 Carryover of disallowed deduction from line 13 of your 2001 Form 4562. .. """ ... ...,.. ,.... '" .. ,. ,. .. 11 Business Income limitation. Enter the smaller of business income (not less than zero) or line 5 (see instrs). . 12 Section 179 expense deduction. Add lines 9 and 10, but do not enter more than line 11. . . , , , . , , . ' . . 13 Carryover of disallowed deduction to 2003. Add lines 9 and 10, less line 12, ,'. ~[l~] Note: 00 not use Part II or Part III below for listed property. Instead, use Part V. I:Eirfll::':::j Special Depreciation Allowance and Other Depreciation (Do not include listeel propert .) 14 Special depreciation allowance for qualified property (other than listed property) placed in service during the tax year (see instructions). , . . , . ' . . . , . . , . , , . . , . . . . ' . , . . ' , . . . . . . , , . . . , , , . ' , . . . . , , . . . . . , . , . ' . . . , . . , . . , , , 15 Property subject to section 168(f)(1) election (see instructions)".... ."""....",'.'....' '..,.,.".,'.' 16 Other depreciation (including ACRS) (see instructions), , . , . . ' , . . . ., "...".,'...,..,., ".""'.".,,,., 7 8 9 10 11 12 IJNUtWUI:n:Win MACRS Depreciation (Do not include listed property.) (See instructions) Section A ~~ ~;;;:;o'~:~;;~;:~~~~;:':;;;'{~~~i;~i:~'~~,~~t:~::~:t:':,~:~g,:::~,~,~O~~'ing t~, t" ;,,, 'nt~ .....i. Section B - Assets Placed in Service Durin 2002 Tax Year Usin the General De reciation S stem (b) Month and (C) Basis for deprecialion (d) (e) (f) year placed (businesslinvestment use Recovery period Convention Method in service only - see instructions) 14 15 16 64,505. (see instructions Listed property. Enter amount from line 28, , , . . ' , . , . . , , , , . . . , . , 21 Total. Add amounts from line 12, lines 141hrough 17, lines 19 and 20 in column (g), and line 21. Enter here and on the appropriate lines of your return, Partnerships and S corporations - see instructions, . , 22 23 For assets shown above and placed In service dunng the current year, enter the portion of the basis attributable to section 263A costs, 23 BAA For Paperwork Reduction Act Notice, see instructions. FDIZ0812L 12/12/02 (g) Depreciation deduction MM MM MM MM Section C - Assets Placed in Service Durin 2002 Tax Year Usin the Alternative De 25 27.5 27.5 39 S/L S/L S/L S/L S/L stem 12 rs 40 rs MM S/L S/L S/L 64,800. Form 4562 (2002) Form 4562 (2002) SUSQUE NA VALLEY PARTNERS 23-2713531 Page 2 I RrlMH.. 1 LJC::".((::: :j Listed Property (Include automobiles, certain other vehicles, cellular telephones, certain computers, and property used for entertainment, recreation, or amusement.) Note: For any vehicle for which you are using the standard mileage rate or deducting lease expense, complete only 24a, 24b, columns (a) through (c) of Section A, all of Section B, and Section C if applicable Section A - De reciation and Other Information (Caution: See instructions for limits for assen er automobiles) 24a Do you have evidence to support the business/investment use claimed? . Yes No 24b If 'Yes,' is the evidence written? . (a) (b) (c) (d) (e) (f) (9) (h) Type of. property (list Date placed i~u:~~~~~t Cost or Basis for depreciation Recovery Methodl Depreciation vehIcles fIrst) in service v use other basis (businessJinvestment period Convention deduction percentage use only) No (i) Elected seclion 179 cost 25 Special depreciation allowance for qualified listed property placed in service during the tax year and used more than 50% In a qualified business use (see instructions) . . . . . . . . . . . . . . 26 Pmp'rty c"d j'" tha, 50% i' a qcalifi'l b",,,,, co, (oe'l ''''ccolio''l, 27 Pmp,,~ ",d 1%" i,,,', a, qcailf"d br"" co, (oe, "TCliO")' 25 B ~ 28 Add amounts in column (h), lines 25 through 27. Enter here and on line 21, page 1. 28 29 Add amounts in column (i), line 26. Enter here and on line 7, page 1. . . . . . . . . . Section 8 - Information on Use of Vehicles Complete thiS section for vehicles used by a sole proprietor, partner, or other 'more than 5% owner,' or related person. If you provided vehicles to your employees, first answer the questions in Section C to see if you meet an exception to completing this section for those vehicles. (a) (b) (c) (d) (e) (f) 30 Total businesslinvestment miles driven Vehicle 1. Vehicle 2 Vehicle 3 Vehicle 4 Vehicle 5 Vehicle 6 during the year (do not include commuting miles - see instructions). . . . . . . . . . . .."... . 31 Total commuting miles driven during the year. . . . . . . . . 32 Total other personal (noncom muting) miles driven. ......... . ..., . .... . . . . . . ,., . 33 Total miles driven during the year. Add lines 30 through 32. . . . . . . . . . . . . . . . . . . . . . . Yes No Yes No Yes No Yes No Yes No Yes No 34 Was the vehicle available for personal use dUring off-duty hours? . . . . ,......."..,.. . 35 Was the vehicle used primarily by a more than 5% owner or related person? . . . . . . . . . . 36 Is another vehicle available for personal use? .."..,....... , . . . . . . . . . , , . . Section C - Questions for Employers Who Provide Vehicles for Use by Their Employees Answer these questions to determine if you meet an exception to completing Section B for vehicles used by employees who are not more than 5% owners or related persons (see Instructions). 37 Do you maintain a written policy statement that prohibits all personal use of vehicles, including commu1mg, by your employees? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 Do you maintain a written policy statement that prohibits personal use of vehicles, except commuting, by your employees? See instructions for vehicles used by corporate officers, directors, or 1 % or more owners. . 39 Do you treat all use of vehicles by employees as personal use? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Yes No 40 Do you provide more than five vehicles to your employees, obtain information from your employees about the use of the vehicles, and retain the information received? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 Do you meet the requirements concerning qualified automobile demonstration use? (see instructions). Note: If your answer to 37, 38, 39, 40, or 47 IS 'Yes, ' do not complete Section B for the covered vehicles. Amortization (a) (b) (c) Amortizable amount (d) Code section (e) (f) Amortization for this year Description of costs Date amortization begins Amortization period or percentage i2 Amortization of costs that begins during your 2002 tax year (see instructions): .tZEFINANCE #2 I 5/31/02 I 1,244.1 REFINANCE #2 1 1/25/02 I 2,921.1 43 44 I I 5 5 ..1 43 144 145. 536. 2,047. 2,728. Form 4562 (2002) Amortization of costs that began before your 2002 tax year. . Total. Add amounts in column (I). See instructions for where to report. . FDIZ0812L 12112/02 Jepartment of the Treasury nternal Revenue Service Rental Real Estate Income and Expenses of ai Partnership or an 5 Corporation ~ See instructions. ~ Attach to Form 1065, Form 1065-B, or Form 1120S. OM8 No. 1545-1186 Form 8825 2002 Name Employer identification number SUSQUEHANNA VALLEY PARTNERS 23-2713531 1 Show the kind and location of each property. See page 2 for additional properties. PARK AND TOWNHOUSE RENTAL A -SELINSGROVE,-PA - - --- - - - - -- --- - -- - -- - -- - - - - --- -- - -- -- --- --- - - - ----- - -- B ------------------------------------------------------------------ c ______________________________________________________----------- D ----------------------------------------------------------------- Properties Rental Real Estate Income A B c D 2 Gross rents. . 2 Rental Real Estate Expenses 3 Advertising... 3 4 Auto and travel. . . . 4 5 Cleaning and maintenance. . . . . . 5 6 Commissions.. ..................... 6 7 Insurance.... . . . . . . . . . . . . . . . . . . . . . 7 B legal and other professional fees. . . . . . B 9 Interest.................. 9 10 Repairs... 10 11 Taxes....... 11 12 Utilities...... 12 13 Wages and salaries. ....... .. 13 14 Depreciation (see instructions). 14 15 Other (list) ~____________ SEE STATEMENT 5 190,713. 8,254. 3,770. 1,370. 47,199. 32 412. 6,663. 388. 64,800. 5,633. 15 16 Total expenses for each property. Add lines 3 through 15. . . . . . . . . . . 16 170, 489. 17 Total gross rents. Add gross rents from line 2, columns A through H . . . . . . . . . . . . . . . . . . . . . 18 Total expenses. Add total expenses from line 16, columns A through H. 19 Net gain (loss) from Form 4797, Part II, line 18, from the disposition of property from rental real estate activities. . . . . . . . . . . . . . . .. ......................... . . . . . . . . . . 17 1B 190,713. -170,489. 19 20 a Net income (loss) from rental real estate activities from partnerships, estates, and trusts in which this partnership or S corporation is a partner or beneficiary (from Schedule K-l). . . . . . . . . . . . . . . . . . . . . . . . . . 20 a b Identify below the partnerships, estates, or trusts from which net income (loss) is shown on line 20a. Attach a schedule if more space is needed: (1) Name (2) Employer identification number ------------------------- ------------------------- ------------------------- ------------------------- ------------------------- ------------------------- 21 Net income (loss) from rental real estate activities. Combine lines 17 through 20a. Enter result here and on: _-J- . Form 1065 or 11205: Schedule K, line 2, or . Form 1065-8: Part I, line 4 BAA For Paperwork Reduction Act Notice, see the separate instructions. Form B825 (2002) SPSZ0101 L 08119/02 Schedule K.' (Form 1065) Department of the Treasury Internal Revenue Service Partner's identifying number .. Partner's name, address, and ZIP code Partner's Share of Income, Credits, Deductiolls, etc OMB No. 1545-0099 2002 beginning 184-12-4759 For calendar year 2002 or tax year , 2002, and ending , 20 Partnership's identifying number .. Partnership's name, address, and ZIP code 23-2713531 M. GRACE WALTER R. D, #4, BOX 175 NEWVILLE, PA 17241 SUSQUEHANNA VALLEY PARTNERS P.O. BOX 151 ELIZABETHTOWN, PA 17022 A This partner IS a 0 general partner [!g limited partner o limited liability company member B What type of entity is this partner? .. . ~ INDIVIDUAL C Is thiS partner a [K] domestic or a 0 fu~ign-p-;;r~;r? - - - - - D Enter partner's % of: (1) BeftC;:r"mT~;[Ig; or (ii) E;~a~f Profit sharing. . , . . _ _ _ _ _ _ _ _ _ _ % _ _ _ _ _ _ _l..J~ % Loss sharing. __________ % _______1.2?: % Ownership of capital. _ _ _ _ _ _ _ _ _ _ % _ _ _ _ _ _ _1.2?: % E IRS Center where partnership filed return: CINCINNATI, OH J Analysis of partner's capital account: b Qualified rehabilitation expenditures related to rental real Credits estate activities. . . . . . . . . . . . c Credits (other than credits shown on lines 12a and 12b) related to rental real estate activities. . . . . . d Credits related to other rental activities. . . . . 13 Other credits. . . . dAA For Paperwork Reduction Act Notice, see Instructions for Form 1065. Income (Loss) Deduc- tions PARTNER 27 F Partner's share of liabilities (see instructions): Nonrecourse. . . . . . . . . . $ Qualified nonrecourse financing. . . . $ Other. . . . . . . . . . . . . . . . . . . . $ G Tax shelter registration number ~ H Check here if this partnership is a publicly traded partnership 0 as defined in section 469(k)(2) . . . . . . . . . . . . , _ . . . . . . . . . . . . . . . I Check applicable boxes: (1) f]Final K-1 (2) o Amended K-1 (a) Capital account at beginning of year (b) Capital contributed during year (c) Partner's share of lines 3, 4, and 7, Form 1065, Schedule M-2 (d) Withdrawals and (e) Capital account at end of distributions year (combine columns (a) through (d)) -905. 1,684. 4,000.) -3,22l. (c) 1040 filers enter the amount in column (b) on: (a) Distributive share item (b) Amount 1 Ordinary income (loss) from trade or business activities. . . 1 2 Net income (loss) from rental real estate activities . . S.EE . LINE. 25 2 3 Net income (/oss) from other rental activities. _ . _ . . . . . . . , . . . . 3 4 Portfolio income (loss): a Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4a b Ordinary dividends, . . . . . . . . . . . . . . . . . . 4b c Royalties. . . . . . . . . . . . . . . . . . . . . . . . . . . . , . . . . . . . . . 4c d Net short-term capital gain (loss). . . . . . . . . . . . . . . . . . . . . . 4d e (1) Net long.term capital gain (loss). . . . . . . . . . . 4e(1) (2) 28% rate gain (loss). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4e(2) (3) Qualified 5-year gain. . , . . , . . . . . . . . . . . . . . . , , . . . . . . _ _ . . . . . . . . 4e(3) f Other portfolio income (loss) (attach schedule). . . . . . . . . 4 f 5 Guaranteed payments to partner. . . . . . . . . . . . . . . . . . . . . . 5 6 Net section 1231 gain (loss) (other than due to casualty or theft) . . . . _ . . . . . . . . . . . . . . . . . . . .. .......... 6 7 Other income (loss) (attach schedule). . . 7 8 Charitable contributions (see instructions) (attach schedule) . . . . . 8 9 Section 179 expense deduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 10 Deductions related to portfolio income (attach schedule) . . . . . . . . . . .. 10 11 Other deductions (attach schedule) . . . . . . . . . . . . 11 12a Low.income housing credit: (1) From section 420)(5) partnerships. . . . . (2) Other than on line 12a(1). .. ......... 1,602. See Partner's Instructions for Schedule K-l (Form J065). :32. Schedule B, Part I, line 1 Schedule B, Part II, line 5 Schedule E, Part I, line 4 Schedule D, line 5, column (I) Schedule D, line 12, column (f) Schedule D, line 12, column (g) Line 5 of worksheet for Sch D, line 29 Enter on applicable In of your return } See Partner's Instructions for Schedule K.] (Form 1065). Enter on applicable In of your return Schedule A, line 15 or 16 See Partner's Instructions for Schedule K.l (Form 1065). ]- Form 8586, line 5 See Partner's Instructions for Schedu Ie K-] (Form 1065). 12c 12d 13 Schedule K-l (Form 1065) 2002 PTP A0312L 12127102 NA VALLEY PARTNERS 23-271353 Schedule K-l (Form 1065) 2002 SUSQUE Invest- ment Interest Self- employ- ment Adjust- ments and Tax Pref- erence Items Foreign Taxes Other 14a Interest expense on investment debts. b (1) Investment Income included on lines 4a, 4b, 4c, and 4f. (2) Investment expenses included on line 10 . 15a Net earnings (loss) from self-employment.. .. . b Gross farming or fishing income. . . . . . . . . . . . . . . . . . . . . . . . c Gross nonfarm income. . ., . . . . . . . . . 16 a Depreciation adjustment on property placed in service after 1986 . . . b Adjusted gain or loss. . . . . . . . . . . . . . . . . . . . . . . . . . c Depletion (other than oil and gas). . . . . . . . . . . d (1) Gross income from oil, gas, and geothermal properties. (2) Deductions allocable to oil, gas, and geothermal properties. e Other adjustments & tax preference items (attach sch). . 17 a Name of foreign country or U.S. possession.. ~ b Gross income from all sources. . . . . . c Gross income sourced at partner level. . . . . . . . d Foreign gross income sourced at partnership level: (1) Passive. . . . . . . . . . . . (2) Listed categories (attach schedule). . . . . . . . . . . . . . (3) General limitation. . . . . . . . . . . . . . . e Deductions allocated and apportioned at partner level: (1) Interest expense. . . . . . . . . . . . . . . . . . . . . , . (2) Other. . . . . . . . . , . . . . . f DeductIOns allocated and apportioned at partnership level to foreign source income: (1) Passive. ............ (2) Listed categories (attach schedule). . . . . (3) General limitation. . . , . . . . . . . . . . . . . . . . . . . . . . . . . gTota1 foreign taxes (check one): ~ 0 Paid OAccrued.. h Reduction in taxes available for credit (attach schedule). . . . . . , . . . . , . . . . , . . . . . 18a Section 59(e)(2) expenditures: a Type ~ _ _ _ _ _ _ _ _ _ _ _ _ _ __ b Amount. . . . , . . . . . , . . .. . . .. .. .. .. .. . . . . . . . . . . , . . . .. , . . . . , , .. ., 18 b 19 Tax-exempt interest income, . . . , . . . . , . , . . . . . . . . . . 19 20 Other tax-exempt income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ., 20 21 Nondeductible expenses, . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . 21 22 Distributions of money (cash and marketable securities). . . . . , , . , .. 22 23 Distributions of property other than money. . . . . . . . . . . . . . . . .. 23 24 Recapture of low-income housing credit: a From section 42(i)(5) partnerships. . . . . . . . . . . . . b Other than on line 24a. 25 Supplemental information required to be reported separately to each partner (attach additional schedules if more spaCe! is needed): (a) Distributive share item 14a 14b(1) 14b(2) 15a 15b lSc 16a 16b 16c 16d(1 ) 16d(2) 16e 17d(1) 17 d(2) 17 d(S) rmtmmmmjjjjj LINE 2 RENTAL REAL ESTATE ACTIVITIES Supple- PROPERTY GROSS NET mental DESCRIPTION INCOME EXPENSES Infor- PARK AND TOWNHOUSE RENTAL mation 15,104. 13,503. $ ROUNDING TOTAL $ PARTNER 27: M. GRACE WALTER PTPA0312L 12/27/02 184-12-4759 (b) Amount NET INCOME Page 2 (c) 1040 filers enter the amount in column (b) on: Form 4952, line 1 82 . ]- See Partner's Instructions for Schedule K-l (Form 1065), Schedule SE, Section A or B See Partner's Instructions for Schedule K-1 (Form 1065). -8. See Partner's Instructions for Schedule K-1 (Form 1065) and Instructions for Form 6251. Form 1116, Part I Form 1116, Part II Form 1116, line 12. See Partner's Instructions for Schedule K-1 (Form 1065). Form 104D, line 8b 4,000. See Partner's Instructions for Schedule K-1 (Form 1065). Form 8611, line 8 PASSIVE NONPASS SEC. 1231 TOTAL 1, 601. PASSIVE 1. 1,602. Schedule K-l (Form 1065) 2002 STATEMENT 1 FORM 1065, SCHEDULE L, LINE 6 OTHER CURRENT ASSETS ADVANCE, AFFILIATE PREPAID EXPENSES...... BEGINNING $ 4,000. $ 5,074. 9,074. $ TOTAL $ STATEMENT 2 FORM 1065, SCHEDULE L, LINE 8 OTHER INVESTMENTS BEGINNING STOCK IN PENNSVIEW WATER CO.............,..................... ........" $ 50,000. $ TOTAL ~ 50,000. $ STATEMENT 3 FORM 1065, SCHEDULE L, LINE 13 OTHER ASSETS BEGINNING SYNDICATION COSTS......,.....,........,.."................. ...,....... $ 75,492. $ TOTAL ~ 75,492. $ STATEMENT 4 FORM 1065, SCHEDULE L, LINE 17 OTHER CURRENT LIABILITIES PREPAID RENTS.......... SECURITY DEPOSITS..... BEGINNING ..........,$ 7,980. $ ......,... 9,430. TOTAL ~ 17,410. $ STATEMENT 5 FORM 8825, LINE 15 OTHER EXPENSES PROPERTY A: PARK AND TOWNHOUSE RENTAL - SELINSGROVE, PA PROPERTY B: - PROPERTY C: - PROPERTY D: - ENDING 4,000. 4,521. 8,521. ENDING 50,000. 50,000. ENDING 75,492. 75,492. ENDING 8,055. 8,545. 16,600. AMORTIZATION. MANAGEMENT FEES OFFICE EXPENSE.,. PROPERTY A PROPERTY B PROPERTY C PROPERTY D $ 2,728. 2,112. 243. STATEMENT 5 (CONTINUED) FORM 8825, LINE 15 OTHER EXPENSES PROPERTY A: PARK AND TOWNHOUSE RENTAL - SELINSGROVE, PA PROPERTY B: - PROPERTY C: - PROPERTY D: - POSTAGE. . . PROPERTY A PROPERTY B PROPERTY C PROPERTY D $ 550. TOTAL $ 5,633. Form 1 065 lTs~eR~t~~~s~tp;rt~~;~hi'p Income 2001 ~ See se arate instructions. ..or calendar ear 2001, or tax ear beginning , 2001, and ending A Prlncip.1 Business Activity RENTAL IRS use only - Do not write or staple in this space. ,20 OMS No. \ 545.0099 o Employer Identification Number Use the IRS label. Other- wise, print or type. 23-2713531 SUSQUEHANNA VALLEY PARTNERS P.O. BOX 151 E LIZABETHTOWN, PA 17022 E Date Business St.rted PARK B Principal Product or Service 6/02/1993 F Total Assets (see ins!rs) C Business Code Number 531110 $ 1,188,980. G Check applicable boxes: (1) Initial return (2) Final return (3) Name change (4) Address change (5) 0 Amended return H Check accounting method: (1) Cash (2) X Accrual (3) Other (specify). . . .. ~ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ I Number of Schedules K-l. Attach one for each person who was a partner at any time during the tax yeal'. . . . . . . . . . . . . .. ~ 34 Caution: Include only trade or business income and expenses on lines 1 a through 22 below. See the instructions for more information. 5 E E I N 0 5 E T R D u U c C T I T 0 I N 0 5 N F 5 0 R L I M I T A T I 0 N 5 Sign Here Paid Preparer's Use Only 1 a Gross receipts or sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b Less returns and allowances. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 a 1b 1c I N C o M E 2 Cost of goods sold (Schedule A, line 8) . . . . . . . . . . . . . . 3 Gross profit. Subtract line 2 from line 1 c. . . . . . . . 4 2 3 Ordinary income (loss) from other partnerships, estates, and trusts (attach schedule) . . . . . . . . . . .. ........................ . . . . . . . . . . . . . 5 Net farm profit (loss) (attach Schedule F (Form 1040)). . . . . . . . . . . 6 Net gain (loss) from Form 4797, Part II, line 18.. ., ...... ......... .... . ..... 4 5 6 7 Other income (loss) (attach schedule). . . . . . . . . . . . . . . . . . . . . . . . . 7 8 Total income (loss). Combine lines 3 through 7 . . . 8 9 Salaries and wages (other than to partners) (less employment credits) . . . . . . . . . . . . . . . . 9 10 Guaranteed payments to partners. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 11 Repairs and maintenance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 12 Bad debts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ., .......................... 12 13 Rent.................. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ., ............................. 13 14 Taxes and licenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. .............................. 14 15 Interest............................................ .......................... ............ 15 16a Depreciation (if required, attach Form 4562) . . . . . . . . . . . . . . . . . . . . . . . . .. ~I b Less depreciation reported on Schedule A and elsewhere on return..... ~ 16c 17 Depletion (Do not deduct oil and gas depletion.) . . . . . . . . . . . . . . . . 17 18 Retirement plans, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 19 Employee benefit programs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 20 Other deductions (attach schedule) . . . ........... 20 21 Total deductions. Add the amounts shown in the far right column for lines 9 through 20. 21 22 Ordinary income (loss) from trade or business activities. Subtract line 21 from line 8. . . . . . . . . . . . 22 Under penalties ot perjury, I declare that I have examined this return, including accompanying schedules and statements, and to the best of my knowledge and belief, it is true, correct, and complete. Declaration of preparer (other than general partner or limited liability company member) is based on all miormation oi which pre parer has any knowledge. ~ ~ M.y the IRS discuss this return with \!1e prefarer shown below (see Instrs). X Yes Preparer's SSN or PTIN \q(p -~~ 0 -~('5 Sign. lure of General Partner or Limited Liability Company Member D.te No Preparer's Signature EIN ~ 23-2003867 Phone No. (71 7) 367 - 9396 Form 1065 (2001) Date 1/25/02 Check if self. ~ employed. . . . Firm's Name (or yours if ~ self.employed), Address, .nd ZIP Code FELTY & C 113 S MAR E T ELIZABETHTOWN, PA 17022 BAA For Paperwork Reduction Act Notice, see separate instructions. PTPA0105L 0110\/02 Form 1065 (2001) SUSQUEHANNA VALLEY PARTNERS 23-2713531 liS#(jiqi:mrAUUt! Cost of Goods Sold (see instructions) Page 2 1 Inventory at beginning of year. . . . . 1 2 Purchases less cost of items withdrawn for personal use. . . . . . . . . 2 3 Cost of labor. . . . . . . . . . . . . 3 4 Additional Section 263A costs (attach schedule) . .. . . . . . . . . . . . . . . . 4 5 Other costs (attach schedule) . . . . . . . . . . . . . . . " . 5 6 Total. Add lines 1 through 5. . . . . . . .. . . . . . . . 6 7 Inventory at end of year. . . . . . . 7 8 Cost of goods sold. Subtract line 7 tram line 6. Enter here and on page 1, line 2. . . 8 9 a Check all methods used for valuing closing inventory: (i) B Cost as described in Regulations Section 1.471-3 (Ii) Lower of cost or market as described in Regulations Section 1.471-4 (iii) Other (specify method used and attach explanation). . . . . . . . . . . . ., ~ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ b Check thiS box If there was a wntedown of 'subnormal' goods as descnbed In Regulations Section 1.471-2(c). . . . '" " . ~ ~ c Check thiS box If the LIFO Inventory method was adopted thiS tax year for any goods (If checked, attach Form 970) ..... . ~ d Do the rules of Section 263A (for property produced or acquired for resale) apply to the partnership? .., ..... . Yes No e Was there any change In determining quantities, cost, or valuations between opening and clOSing Inventory? . . . . .. 8 Yes No If 'Yes', attach explanation. . H$Pb.*#9.J.J'iJ?:i??:::l Other Information 1 What type of entity is filing this return? Check the applicable box: a ~ Domestic general partnership b ~ Domestic limited partnership c Domestic limited liability company d Domestic limited liability partnership e Foreign partnership f Other. . .. ~ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ _ _ _ _ _ 2 Are any partners in this partnership also partnerships? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 During the partnership's tax year, did the partnership own any interest in another partnership or in any foreign entity that was disregarded as an entity separate from its owner under Regulations Sections 301.7701-2 and 301.7701.3? If yes, see instructions for required attachment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Is this partnership subject to the consolidated audit procedures of Sections 6221 through 6233? If 'Yes,' see Designation of Tax Matters Partner below. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Does this partnership meet all three of the following requirements? a The partnership's total receipts for the tax year were less than $250,000; b The partnership's total assets at the end of the tax year were less than $600,000; and c Schedules K.l are filed with the return and furnished to the partners on or before the due date (including extensions) for the partnership return. If 'Yes,' the partnership is not required to complete Schedules L, M.l, and M.2; item F on page 1 of Form 1065; or item J on Schedule K-l. , , , . . . . . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Does this partnership have any foreign partners? If 'Yes,' the partnership may have to file Forms 8804, 8805 and 8813. See instructions. . . 7 is this partnership a publicly traded partnership as defined in Section 469(k)(2)?.. .... ... . ..... ....... . . 8 Has this partnership filed, or is it required to file, Form 8264, Application for Registration of a Tax Shelter? . 9 At any time during calendar year 2001, did the partnership have an interest in or a signature or other authority over a financial account in a foreign country (such as a bank account, securities account, or other financial account)? See the instructions for exceptions and filing requirements for Form TD F 90.22.1. If 'Yes,' enter the name of the foreign country. ~ x x x x X X X X 10 During the tax year, did the partnership receive a distribution from, or was it the grantor of, or transferor to, a foreign trust? If 'Yes,' the partnership may have to file Form 3520. See instructions. , ...... . " .. .. .......... ,.... ... . 11 Was there a distribution of property or a transfer (e.g., by sale or death) of a partnership interest during the tax year? If 'Yes,' you may elect to adjust the basis of the partnership's assets under Section 754 by attaching the statement described In the instructions under Elections Made by the Partnership. . . . . . . . . . . . 12 Enter the number of Forms 8865 attached to this return ~ 0 X X Designation of Tax Matters Partner (see instructions) -nter below the general partner designated as the tax matters partner (TMP) for the tax year of this return: I'-Jame of Designated TMP ~ Address of Designated TMP .. RONALD L. FELTY 113 S. MARKET ST. ELIZABETHTOWN, PA identifying NumberofTMP" 164-38-3404 17022 PTPA0112L 12103/01 F nrm 1 n&;<; f?()() n Form 1065 (2001) SUS UEHANNA VALLEY PARTNERS 23-2713531 :$eh~aml:hKn) Partners' Shares of Income, Credits, Deductions, etc (a) Distributive share items 1 Ordinary Income (loss) from trade or business activities (page 1, line 22) . . 2 Net income (loss) trom rental real estate activities (attach Form 8825). . . . . 3a Gross income trom other rental activities. . . . . . . . . . . . . . . . . . L~ b Expenses from other rental activities (attach sch) . . . . . .. .................. ~ c Net income (loss) trom other rental activities. Subtract line 3b from line 3a. 4 Portfolio income (loss): a Interest income. . . . . . . . . . . . . . . . . . . . b Ordinary dividends. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . c Royalty income. . . . . . . . . . . . . . . d Net short-term capital gain (loss) (attach Schedule 0 (Form 1065)). e (1) Net long-term capital gain (loss) (attach Schedule 0 (Form 1065)).. .. . . . . . . . . (2) 28% rate gain (lass).. ~ _ _ _ _ _ _ _ _ _ _ _ (3) Qualitied 5-year gain.. ~ f Other portfolio income (loss) (attach schedule). . . . . . . . . . . . . . . . 5 Guaranteed payments to partners. . . . . . . . . . . . . . . . . . . . . . . . 6 Net Section 1231 gain (loss) (other than due to casualty or theft) (attach Form 4797). . ..' 7 Other income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Charitable contributions (attach schedule) . . . . . . . . . . . . . . . . . . . . . 9 Section 179 expense deduction (attach Form 4562)............ ............. 10 Deductions related to portfolio income (itemize) . . . . . . . . . . . 11 Other deductions. . . . . . . . . . _ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12a Low-income housing credit: (1) From partnerships to which Section 420)(5) applies. . . . . . . . . . . . . . . . . . . . . (2) Other than on line 12a(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b Qualified rehabilitation expenditures related to rental real estate activities (attach Form 3468). .. ................. c Credits (other than credits shawn on lines 12a and 12b) related to rental real estate activities. . . . . . . . . . . . . . . . . . d Credits related to other rental activities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Other credits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14a Interest expense on investment debts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b (1) Investment income included on lines 4a, 4b, 4c, and 4f above. (2) Investment ex enses included on line 10 above. . . . . . . . . . . . . . . . 15a Net earnings (loss) from self-employment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b Gross farming or fishing income. . . . . . . . . . , , . . . . . . . . . . . . . , . . .. .............,..."..,. c Gross nonfarm income, . , . . . . , , , . . , . , . . . , , . . . . . , . . , . . , . , . . . . . . . . . . . . . . . . . . . . . , . . , . . . . . . . . 16a Depreciation adjustment on property placed in service after 1986.. ......... '" ,..,., .., ., ,... b Adjusted gain or loss. . . . . . . . . . . . . . . , . . . , , . . . . . . . . . . . . . . . . . . . . , . . , . . . , . . . . . . . . . . . . . . c Depletion (other than oil and gas). . . . . . . . . . . . . . . . , , , . . . , . , . . . . , . , . . . . . . . . , . . . . . . . . . . . . . . , d (1) Gross income trom oil, gas, and geothermal properties. . . . . . . . . . . . . . . . . . . . . . . . . . . . , . . . . . (2) Deductions allocable to oil, gas, and geothermal properties. , . . . . . . . . . . . . . . . . . . . . . . e Other adjmnts & tax pref items............... ... SEE. STATEME.NT.1 17 a Name of foreign country or U.S. possession. . . . .. ~ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ b Gross income trom all sources. . . . . . . . . . . . . . . , . . . . . . . . . . . . , . . , . . . . . . . . . , . . . . . . . , . . . . . . , . . c Gross income sourced at partner level. . , . . . . . . . . . , . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . d Foreign gross income sourced at partnership level: (1) Passive ~ (2) Listed categories (attach sch) ~ e Deductions allocated and apportioned at partner level: (1) Interest expense ~ (2)Othe( . . . . f Deductions allocated and apportioned at partnership level to foreign source income: (1) Passive ~ (2) Listed categories (attach sch) ~ 9 Total foreign taxes (check one): ~ 0 Paid 0 Accrued, h Reduction in taxes available for credit (attach schedule). . . . . . . . . . . 18 Section 59(e)(2) expenditures: a Type. ~ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ b Amount , ~ 19 Tax-exempt interest income. . . . . . . . . . 20 Other tax-exempt income. , . . , . . . . . . . . 21 Nondeductible expenses. . . . . , . . . . . . . . . . . . . , . , . 22 Distributions of money (cash and marketable securities). , 23 Distributions of property other than money. , . . . . . , . . 24 Other Items and amounts reqUired to be reported separately to partners (attach schedule) . . . . Income (Loss) Deduc- tions Credits lVest- ,lent Interest Self- Employ- ment Adjust- ments and Tax Prefer- ence Items Foreign Taxes 'ther BAA Page 3 (b) Total amount -8,840. 2,033. 4f 5 6 7 8 9 10 11 -33,207. 12 a 1) 12a (2) 12b 12c 12d 13 14a 14 b 1) 14b (2) 15a 15b 15c 16a 1Gb 16c 16d 1 16d (2) 16e 2,033. 4 064. -117,401. -70. (3)Generallimilalion ~ (3)Generallimitation ~ 17 f (3) 17g 17h 18b 19 20 21 22 23 34,000. 365. Form 1065 (2001) PTP AOl :141 Ol/Ol/n? Form 1065 (2001) SUSQUEHANNA VALLEY PARTNERS 23-2713531 Analysis of Net Income (Loss) 1 Net Income (loss). Combine Schedule K, lines 1 through 7 in column (b). From the result, subtract the sum of Schedule K, lines 8 throu h 11, 14a, 17 ,and 18b. . 2 Analysis by (i) Corporate (ii) Individual (iii) Individual (iv) Partnership partner type: (active) (passive) Page 4 -40,014. (vi) Nominee/Other 1 (v) Exempt organization a General partners . . . b limited artners. Scn:eaQhWV::: .' Balance Sheets -9,915. Assets -257. 1 Cash... 2a Trade notes and accounts receivable. . . . . . . . b Less allowance for bad debts. . . . . 3 Inventories.................. ............ 4 U.S. government obligations. . . . . . . . . . . . . . . 5 Tax-exempt securities. . . . . . . . . . . . . . . . . . . . . 6 other current assets (attach schedule). S E.E . .s T .2. 7 Mortgage and real estate loans. . . . . . . . . . . . . 8 Other investments (attach schedule) . . S E.E . .s T .3. 9a Buildings and other depreciable assets. . . . . . b Less accumulated depreciation. . . . . . . . . . lOa Depletable assets. . . . . . . . . . . . . . . . . . . . . . . . . b Less accumulated depletion. . . . . . . . . . . . . . . 11 Land (net of any amortization). . . . . . 12a Intangible assets (amortizable only). . . . . . . . . b Less accumulated amortization. .. , . . 13 Other assets (attach schedule) S E.E . ST .4. 14 Total assets. . . . . . . . . . . . . . . . . . . . . . . . . . . Liabilities and Capital 15 Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . 16 Mortgages, notes, bonds payable in less than 1 year. . . . 17 other current liabilities (attachsch)... SE.E. S1. .5. 18 All nonrecourse loans. . . . . . . , . . . . . . . . . . . . . 19 Mortgages, notes, bonds payable in 1 year or more. . . . . 20 Other liabilities (attach schedule) . . . . . . . . . . . . . . . . . 21 Partners' capital accounts.................. 157,092. 22 Total liabilities and capital. . . . . . . . . . . . . . . . . 1 , 813, 949 . :sE;::~d:U'&/'M( ~~f~~~~~;r~~~e~ro~5c~n~~h<;d~~s~ rse:n~w~~e~~Y~~~'~ Income (Loss) per Return 9,074. 264,669. 4,281. 262,622. i'.I'!!::I.II.'I.I'IIII"I.I'II:.II::'i:~'111:1'.'I"il:I..I'IIII:'I\'I!':I:I:I".II::I 7,638. 21,565. 17,410. 1 , 626 , 171 . 1,080,854. 83,078. 1,188,980. ~ 1 Net income (loss) per books. . . . "..... . -40,014. 6 Income recorded on books this year not included 2 Income included on Schedule K, lines 1 through 4, on Schedule K, lines 1 though 7 (itemize): 6, and 7, not recorded on books this year (itemize): a Tax-exempt interest. . $ ------------ -------------------- -------------------- -------------------- 7 Deductions included on Schedule K, lines 1 through 11, 3 Guaranteed payments (other than health insurance). . 14a, 17g, and 18b, not charged against book income this 4 Expenses recorded on books this rear not included year (itemize): on Schedule K, lines 1 through 1 , 14a, 17g, and a Depreciation. . . . . $ 18b (Itemize): -----.------ a Depreciation. . . . . $ ----------- --------------------- b Travel and $ -------------------- entertainment. . . . ----------- 8 Add lines 6 and 7. . . . . . .."" , ..... . . . .. . ------------------- 9 Income (loss) (Analysis of net Income 5 Add lines 1 throuqh 4. . ..... . .. . -40,014. (loss), line 1). Subtract line 8 from line 5. -40,014. VSZHeaWc.:1VP2i] Analysis of Partners' Capital Accounts (Not required if question 5 on Schedule B is answered 'Yes.') 1 Balance at beginning of year. . . .., . 157,092. 6 Distributions: a Cash. . . . . .", . ...... . . . 34,000. 2 Capital contributed during year. . . . .... . 365. b Property. . ...... . ,.. ' .. . 365. 3 Net income (loss) per books. '.. . .". . -40,014. 7 other decreases (itemize): _ _ _ _ _ _ _ _ _ _ _ 4 Other increases (itemize): -------------------- ---------- -------------------- 34,365. 8 Add lines 6 and 7. . . . . .. . ...... , ........ . 5 Add lines 1 through 4. . .,.,.... . 117,443. 9 Balance at end of year. Subtract line 81rom line 5. . . . 83,078. PTPA0134l 01/01/02 Form 1065 (2001) Form 4562 Depreciation and Amortization (Including Information on Listed Property) ~ See separate instructions. ~ Attach this form to your return. OMB No. 1545-0172 2001 67 Department of the Treasury I nternal Revenue Service (99) lame(s) Shown on Return SUSQUEHANNA VALLEY PARTNERS Business or Activity to Which This Form Relates Identifying Number 23-2713531 FORM 8825, RENTAL REAL ESTATE - PARK AND TOWNHOUSE RENTAL /]?~Whr:J:://:l ~~~e~if~~ut~a;;~~n'~s~eJ~~~~~y ~ ~~~~?elt: ~:~~eb~Yor~ ~~ e :o~~~~ o~rl y'9 1 MaXimum dollar limitation. If an enterprise zone business, see instructions. . 2 Total cost of Section 179 property placed in service (see instructions) . . . . . 3 Threshold cost of Section 179 property before reduction in limitation. . . . . . . . . . . . . . . 4 Reduction in limitation. Subtract line 3 from line 2. If zero or less, enter -0-. . . . . . . . . . . . . . . . . . . 5 Dollar limitation for tax year. Subtract line 4 from line 1. If zero or less, enter -0-. If married filing se aratel , see instructions. . . . . . . . . . . . . . . . . . . . . . . . . 6 1 2 3 4 $24,000. $200,000. 5 (a Description of property (b) Cost (business use only) c) Elected cost 7 Listed property. Enter amount from line 27. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 8 Total elected cost of Section 179 property. Add amounts in column (c), lines 6 and 7.. .. 8 9 Tentative deduction. Enter the smaller of line 5 or line 8 . . . . . . . . . . . . . , . , , . . . . , . , , . . , , , 9 10 Carryover of disallowed deduction from 2000 (see instructions). , , , , . , . , , , . . , , , , . . . , , , , . 10 11 Business income limitation. Enter the smaller of business income (not less than zero) or line 5 (see instrs), , , 11 12 Section 179 expense deduction. Add lines 9 and 10, but do not enter more than line 11. , . , , , , , , , 12 13 Carryover of disallowed deduction to 2002. Add lines 9 and 10, less line 12.."",. ~~ Note: Do not use Part II or Part 11/ below for listed property (automobiles, certain other vehicles, cellular telephones, certain computers, or property used for entertainment, recreation, or amusement). Instead, use Part V for listed property. IJ!MdJH{::rWJ MACRS Depreciation for Assets Placed in Service Only During Your 200'1 Tax Year (Do not include listed property.) Section A - General Asset Account Election 14 If you are making the election under Section 168(i)(4) to group any assets placed in service during the tax year into one or more general asset accounts, check this box. See instructions, , , , , , . . , , , , , , . , , , , , . . , . , . , , . , , , , , . , , ,. ~ D- Section B - General Depreciation System (GOS) (See instructions) (a) (b) Month and (C) Basis for depreciation (d) (e) (f) (g) Depreciation Classification of property year placed (business/investment use Recovery period Convention Method deduction in service only - see instructions) 16 a Class life. , , b12-year. 12 rs c 40- ear. 40 r 5 MM :RarUU:/::{? Other De reciation (Do not include listed property.) (See instructions) 17 GDS and ADS deductions for assets placed in service in tax years beginning before 2001. 18 Property subject to Section 168(f)(1) election",.", , ",. '" ,. 19 ACRS and other depreciation. , , , . . , . . , . , , , . :::~affJM::::fl Summary (See instructions) 20 Listed property, Enter amount from line 26, . . . . . , . , , . . . , , , . . . . . . , . , , 21 Total. Add deductions from line 12, lines 15 and 16 in column (g), and lines 17 through 20. Enter here and on the appropriate lines of your return, Partnerships and S corporations - see instructions. , , . . . . . . . . , . , , . . . , , , , , . 22 For assets shown above and placed in service during the current year, enter the portion of the basis attributable to Section 263A costs. . . , , . 22 15a 3-year property, . b 5-year property , c 7 -year property, , d 10-year property. e 15-year property, f 20-year property. 9 25-year property. h Residential rental, , . property. , , , , . , Nonresidential real. . property. . 25 27.5 27.5 39 51 L 51 L S/L 51 L S/L MM MM MM MM Section C - Alternative Depreciation System (ADS) (See instructions) 51 L 51 L S/L 17 18 19 13,879. 64,766. 20 21 SUS UEHANNA VALLEY PARTNERS 23 - 2713531 No (e) Basis for depreciation (business/investment use only) Recovery period Depreciation deduction (i) Elected Section 179 cost 24 Property used more than 50% in a Qualified business use (see instructions): =J 25 Pmpee'y c>'d 1%" Ie,,; '0 al,"anti'd bro,,,; uoe (,,, '0'10"00')' 26 Add amounts in column (h). Enter the total here and on line 20, page 1. . . . 27 Add amounts in column (i). Enter the total here and on line 7, page 1. . . . . . . . Section B - Information on Use of Vehicles Complete this section for vehicles used by a sole proprietor, partner, or other 'more than 5% owner,' or related person. If you provided vehicles to your employees, first answer the questions in Section C to see if you meet an exception to completing this section for those vehicles. E ............ 26 (a) (b) (c) (d) (e) (f) 28 Total business/investment miles driven Vehicle 1 Vehicle 2 Vehicle 3 Vehicle 4 Vehicle 5 Vehicle 6 during the year (do not include commuting miles - see instructions). . . . . . . . . . . . . . . . . . . 29 Total commuting miles driven during the year. . . .... . 30 Total other personal (noncommuting) miles driven. . . . . . . . . . . . ,..' . . . . . . . . . , .. . Sl Total miles driven during the year. Add lines 28 through 30. . . . . . . . , . , . . . , . , . . .." . Yes No Yes No Yes No Yes No Yes No Yes No 32 Was the vehicle available for personal use during off-duty hours? . . . . . . . . . . . . , . . . . . . . . 33 Was the vehicle used primarily by a more than 5% owner or related person? . . , , . . , . . . 34 Is another vehicle available for personal use? . . '........, . .... '. . . . . , . , . . Section C - Questions for Employers Who Provide Vehicles for Use by Their Employees Answer these questions to determine if you meet an exception to completing Section B for vehicles used by employees who are not more than 5% owners or related persons (see instructions). 35 Do you maintain a written policy statement that prohibits all personal use of vehicles, including commuting, by your employees? . . , . . . . . . . , . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . , . . . , . . . . . . . . . . . . . . . . . . . . . . . . , Yes No 36 Do you maintain a written policy statement that prohibits personal use of vehicles, except commuting, by your employees? See instructions for vehicles used by corporate officers, directors, or 1 % or more owners.. ..." 37 Do you treat all use of vehicles by employees as personal use? . . . . . . . . . . ., ......,.......... . , . . . . . . . . 38 Do you provide more than five vehicles to your employees, obtain information from your employees about the use of the vehicles, and retain the information received? . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . , . , . . . . . . . . . . . . , . 39 Do you meet the requirements concerning qualified automobile demonstration use? (See instructions) . . . Note: If your answer to 35, 36, 37, 38, or 39 is 'Yes,' do not complete Section B for the covered vehicles. l~;jtfMI':::: Amortization (a) (b) (c) Amortizable amount (d) Code Section (e) (I) Amortization lor this year Description of costs Date amortization begins Amortization period or percentage 40 Amortization of costs that begins during your 2001 tax year (see instructions): I I 41 Amortization of costs that began before your 2001 tax year. . 42 Total. Add amounts in column (t). See instructions for where to report. . " "-'" "Xi;;:;::;@li\"f~ .....'.;.. .:.;;:::::;:;.;:;:;:::;:.:::.;.:.; I 41 142 2,234. 2,234. FDIZ0812L 12/29/01 Form 4797 Sales of Business Property (Also Involuntary Conversions and Recapture Amounts Under Sections 179 and 280F(bX2)) ~ Attach to your tax return. ~ See separate instructions. 1epartment of the Treasury 1ternal Revenue Service (99) Name(s) Shown on Return OMS No. 1545-0184 2001 27 SUSQUEHANNA VALLEY PARTNERS 1 Enter the gross proceeds from sales or exchanges reported to you for 2001 on Form(s) 1099-8 or 1099-S (or substitute statement that ou are includin on line 2, 10, or 20 (see instructions). 1 576, 000 . Rirl'Jttnm Sales or Exchanges of Property Used in a Trade or Business and Involuntary Conversions from Other Than Casualty or Theft - Most Property Held More Than 1 Year (See instructions.) 2 (b) Date acquired (C) Date sold (d) Gross sales (e) Depreciation (I) Cost or other (g) Gain or (loss) (a) Description 01 property (month, day, year) (month, day, year) price allowed or basis, plus Subtract (I) from allowable since improvements and the sum of acquisition expense of sale (d) and (e) TOWNHOUSES #9 THROUGH #24 6/02/93 7/31/01 576,000. 198,60:2. 3 Gain, If any, from Form 4ti84, line 39. . . . . . . . . . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . , . 4 Section 1231 gain from installment sales from Form 6252, line 26 or 37. . 5 Section 1231 gain or (loss) from like-kind exchanges from Form 8824 . . . . . . . . . . . . 6 Gain, if any, from line 32, from other than casualty or theft. . . . . . . . . . . . . . . . . . . 807,809. -33,207. 3 4 5 6 7 -33,207. 7 Combine lines 2 through 6. Enter the gain or (loss) here and on the appropriate line as follows. . . . . Partnerships (except electing large partnerships). Report the gain or (loss) following the instructions for Form 1065, Schedule K, line 6. Skip lines 8,9, 11, and 12 below. 5 corporations. Report the gain or (loss) following the instructions for Form 1120S, Schedule K, lines 5 and 6. Skip lines 8,9, 11, and 12 below, unless line 7 is a gain and the S corporation is subject to the capital gains tax. All others. If line 7 IS zero or a loss, enter the amount from line 7 on line 11 below and skip lines 8 and 9. If line 7 is a gain and you did not have any prior year section 1231 losses, or they were recaptured in an earlier year, enter the gain from line 7 as a long-term capital gain on Schedule D and skip lines 8, 9, 11, and 12 below. 8 Nonrecaptured net section 1231 losses from prior years (see instructions). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 9 Subtract line 8 from line 7. If zero or less, enter -0-. Also enter on the appropriate line as follows (see instructions) . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 5 corporations. Enter any gain from line 9 on Schedule D (Form 1120S), line 15, and skip lines 11 and 12 below. All others. If line 9 is zero, enter the gain from line 7 on line 12 below. If line 9 is more than zero, enter the amount from line 8 on line 12 below, and enter the gain from line 9 as a long.term capital gain on Schedule D. l:aitUt/:?l Ordinary Gains and Losses 10 O,"oo'yg"" 00' ,,,'" '01 'OO'U"'I 0' ,,," 11 "''j"gh 17 ('OO'U'1 pmp,rty h,1d 1 r"" I",), 11 Loss, if any, from line 7. . . . . . . . . . . . . . . . . . . . . . 12 Gain, if any, from line 7 or amount from line 8, if applicable. . . 13 Gain,ifany,fromline31... ......... 14 Net gain or (loss) from Form 4ti84, lines 31 and 38a. . . . . . 15 Ordinary gain from installment sales from Form 6252, line 25 or 36. 16 Ordinary gain or (loss) from like-kind exchanges from Form 8824 . . 11 12 13 .. . ... .... 14 15 16 17 Recapture of section 179 expense deduction for partners and S corporation shareholders from property dispositions by partnerships and S corporations (see Instructions). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Combine lines 10 through 17. Enter the gain or (loss) here and on the appropriate line as follows a For all except individual returns. Enter the gain or (loss) from line 18 on the return being filed. b For individual returns: (1) If the loss on line 11 Includes a loss from Form 4684, line 35, column (b)(ii), enter that part of the loss here. Enter the part of the loss from income-producing property on Schedule A (Form 1040), line 27, ~~1r~h~ PF~;~f4~~/0IT~efrfElli0)~PS~~ i~~~r~~tTo~ e~Plo~ee o.n S.chedul.e ^- (F or~ .1.040): .Ii.ne 2.2. .loentlfY. (2) ~g~~t1b~~i~~e1~ainor (loss) on. line .1.8 excluding the.l.oss,. if any,. on.line.18b(1). Enter here and. on. . Rl1l1 ~n'" P~,,'u~::t.t"\.&'n....Lr Cat4:llrti",., ^,..... M,.,.fi...^ ...........,.. i.............II......;,."............ 17 18 . 18b (1) 18 b (2) Form 8825 Rental Real Estate Income and Expenses of a Partnership or an S Corporation OMB No. 1545.1186 lepartment of the Treasury \ternal Revenue Service .. See instructions. .. Attach to Form 1065, Form 1065-B, or Form 11205. 2001 Name Employer Idenlilicalion Number SUSQUEHANNA VALLEY PARTNERS 23-2713531 1 Show the kind and location of each property. See page 2 for additional properties. PARK AND TOWNHOUSE RENTAL A ----------------------------------------------------------------- SE LI NSGROVE, PA B ----------------------------------------------------------------- c ______________________________________________________----------- o ----------------------------------------------------------------- Properties Rental Real Estate Income A B C D 2 Gross rents. . .. . ... . ... , .. . ,.. . 2 217,737. Rental Real Estate Expenses 3 Advertising. ...,............. . ,..,.. . 3 4 Auto and travel. . . . . . . . ...... . . . ..,. . 4 5 Cleaning and maintenance. . . . . . ..... . 5 4,687. 6 Commissions. . . . . . . . . . . . . . . . . .,.... . 6 1,000. 7 Insurance. . . . . . . . . . . . . . . . . . . . . . ,.., . 7 5,062. 8 Legal and other professional fees. . . . . . 8 120. 9 Interest. . . . . , . . . . . . . . . . . . . . . . . . . , . . . 9 96,275. 10 Repairs. ." , , . . . . . . . . . . . . ....... . 10 16 948. 11 Taxes. . . . ..,......., . ,...... , ....,. . 11 11,479. 12 Utilities.. . .. . "........ . ... . .... . 12 2,183. 13 Wages and salaries. . . . . . . . . . . "... , 13 14 Depreciation (see instructions). . .... . 14 78,645. 15 Other (list) .. ------------- SEE STATEMENT 5 10,178. -------------------- 15 -------------------- 16 Total expenses lor each property. Add lines 3 through 15. . . . . . . . . . . . . . . . 16 226,577. 17 Total gross rents. Add gross rents lrom line 2, columns A through H . . ...".....,. . .".. . . , , . . , . . , ....... . 17 217,737. 18 Total expenses. Add total expenses from line 16, columns A through H. . . . . . . . . . . . . ....' . . . . . . . . . . . . . . . . . . 18 226,577. 19 Net gain (loss) from Form 4797, Part II, line 18, lrom the disposition of property from rental real estate activities. .... . .,............,.......,......,. . "....,.....,....,.". . . . . . . . , . . . . . . . . . , """ . 19 20 a Net income (loss) lrom rental real estate activities from partnerships, estates, and trusts in which this partnership or S corporation is a partner or beneficiary (from Schedule K-l). . . . . . . . ,..... . ......... . ...... . 20a b Identify below the partnerships, estates, or trusts from which net income (loss) is shown on line 20a. Attach a schedule if more space is needed: (1) Name (2) Employer identification number ------------------------- ------------------------- ------------------------- ------------------------- ------------------------- ------------------------- 21 Net income (loss) from rental real estate activities. Combine lines 17 through 20a. Enter result here and on: :J- . Form 1065 or 11205: Schedule K, line 2, or 21 -8,840. . Form 1065-8: Part I, line 4 BAA For Paperwork Reduction Act Notice, see the separate instructions. Form 8825 (2001) Schedule K-1 (Form 1065) Partners Share of Income, Credits, DeductIOns, Etc OMB No. 1545.0099 Department of the Treasury Internal Revenue Service beglnnin 184-12-4759 2001 'artner's identif in number" Partner's Name, Address, and ZIP Code , 20 number .. Partnership's Name, Address, and ZIP Cod" 23-2713531 M. GRACE WALTER R. D. #4, BOX 175 NEWVILLE, PA 17241 SUSQUEHANNA VALLEY PARTNERS P .0. BOX 151 E LIZABETHTOWN, PA 11022 A This partner is a general partner o limited liability company member B What type of entity is this partner?.. ~ I ND IVI DUAL C Is this partner a [8] domestic or a 0 ~~ign-p;rtn;? - - - - - D Enter partner's % of: (I) Beft'':r~?~;Ug~ or (ii) E;~a~f Profitsharing.. __________% _______~.J~% Loss sharing. . . _ _ _ _ _ _ _ _ _ _ % _ _ _ _ _ _ _ ~.J ~ % Ownership of capital.. __________ % _______~.J~ % E IRS Center where partnership filed return: C I N C I N NA T I J Analysis of partner's capital account: [R] limited partner F Partner's share of liabilities: Nonrecourse. . . . . . . . . . . . Qualified nonrecourse financing. Other. . . . . . . . . . . . . . . . . . . . . . G Tax shelter registration number ~ $ $ $ H Check here if this partnership is a publicly traded partnership as defined in Section 469(k) (2'). . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 0 I Check applicable boxes: (1LDFinal K-] (2) OAmended K.l (a) Capital account at beginning of year (b) Capital contributed during year (c) Partner's share of lines 3,4, and 7, Form 1065, Schedule M.2 (d) Withdrawals and (e) Capital account at end of distributions year (combine columns (a) through (d)) 6,264. -3,169. 4,000. -905. (c) 1040 filers enter the amount in column (b) on: (a) Distributive share item (b) Amount Income (Loss) 1 Ordinary income (loss) from trade or business activities. 2 Net income (loss) from rental real estate activities. . . . . . . . . S.E E. . L.I N.E . 25 3 Net income (loss) from other rental activities. . . . . . . . . . 4 Portfolio income (loss): a Interest. . . . . . . . . . . b Ordinary dividends. . . . . . . . . . . . . . . . . . . . . c Royalties. . . . . . . . . . . . . . . , . d Net short-term capital gain (loss). . . . . . . .. ........... e (1) Net long-term capital gain (loss) . . . . . (2) 28% rate gain (loss). . . . . . . . . . . . . . . . . . (3) Qualified 5-year gain. . . . . . . . , f Other portfolio income (loss) (attach schedule). . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Guaranteed payments to partner. . . . . . . . . . . . . . . . . . . . . . . . . . . 1 2 3 -700. See Partner's Instructions for Schedule K-l (Form 1065), 4a 4b 4c 4d 4e(1 ) 4e(2) 4e(3) 4f 5 161 _ Schedule 8, Part I, line 1 Schedule 8, Part II, line 5 Schedule E, Part I, line 4 Schedule D, line 5, column (f) Schedule D, line 12, column (f) Schedule D, line 12, column (g) Line 4 of worksheet for Sch D, line 29 Enter on applicable In of your return } See Partner's Instructions for _ 2,630. Schedule K-l (Form 1065). Enter on applicable In of your return Schedule A, line 15 or 16 Deduc- tions 6 Net Section 1231 gain (loss) (other than due to casualty or theft). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Other income (loss) (attach schedule). . . . . . . . . . . . . . . . 8 Charitable contributions (see instructions) (attach schedule) 9 Section 179 expense deduction. . . . . . . . . . . . . . . . 10 Deductions related to portfolio income (attach schedule) . . . . 11 Other deductions (attach schedule). . . . . . . . . . 12a Low-income housing credit: (1) From Section 420)(5) partnerships. . . . . . . . . . (2) Other than on line 12a(1). . . . . . . . . . . . . . . . . . . . . . . 6 7 8 ... ......... 9 ... ...... .... 10 ......... 11 See Partner's Instructions for Schedule K-l (Form 1065) b Qualified rehabilitation expenditures related to rental real Credits estate activities. . . . . . . . . . . . . . . . . . . . . . . . . . . . c Credits (other than credits shown on lines 12a and 12b) related to rental real estate activities. . . . . . . . . . . . . . . . . . 12 c d Credits related to other rental activities. . . . . . . . . . . . . . . .. 12 d 13 Other credits 13 BAA For Paperwork Reduction Act Notice, see instructions for Form 1065. J- Form 8586, line 5 } See Partner's Instructions for Schedule K-l (Form 1065). Schedule K-1 (Form 1065) 2001 PTPA0312L 01/01/02 PARTNER 27 Schedule K-1 (Form 1065) 2001 SUS UE, ..NA VALLEY PARTNERS (a) Distributive share item Invest- . ment Interest Self- employ- ment Adjust- ments and Tax Pref- erence Items Foreign Taxes Other Supple- mental Infor- mation 16 a Depreciation adjustment on property placed in service after 1986 . . . . b Adjusted gain or loss, . . . . . , . , . . . . . . . . . . c Depletion (other than oil and gas). . . . . . . . . , , , . . . . . . . . d (1) Gross income from oil, gas, and geothermal properties. (2) Deductions allocable to oil, gas, and geothermal properties. e Other adjustments & tax preference items (attach sch). . . 17 a Name of foreign country or U.S. possession. ~ _ _ _ _ _ _ _ _ _ _ _ _ _ ~?:~?~~~~~~~~~~~~:) b Gross income from all sources. . . . . , . . . . . . . . . . . , . . . . . . . . . c Gross income sourced at partner level. . ., ,.....,..... d Foreign gross income sourced at partnership level: (1) Passive, . . . . . . . . . . . . . . . . . . . . . , . . . . (2) Listed categories (attach schedule). . . (3) General limitation. . . . . . . . . . . . . . . . . . . . e Deductions allocated and apportioned at partner level: (1) Interest expense. . . . . . . . . . . . . , . . . . .. ........,..., (2) Other. . . . . . . . . . . . . . . . . . . . . . , . . . . . . . f Deductions allocated and apportioned at partnership level to foreign source income: (1) Passive... ...... .... '.... ,....,......... .. ................ 17f(1) (2) Listed categories (attach schedule). . . , . . . . . . . . . , . . . . . . . . . . . ,. 17f(2) (3) General limitation, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , . . . . . . .. 17f(3) 9 Total foreign taxes (check one): ~ 0 Paid o Accrued .. 17g h Reduction in taxes available for credit (attach schedule). . . . . , . , . . . . . . . . .. 17 h 18a Section 59(e)(2) expenditures: a Type ~ _ _ _ _ _ _ _ _ _ _ _ _ _ __ b Amount. . . , . . . . . , . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 18 b 19 Tax-exempt interest income.....,...,...,........ 19 20 Other tax-exempt income. . . . . . . . . . . . , . . . . . . . . , . . . . , . . . . . . . 20 21 Nondeductible expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 22 Distributions of money (cash and marketable securities). . , . , . . . , ., 22 23 Distributions of property other than money. . . . . . , . . . . . . . . . . . , . . .. 23 24 Recapture of low-income housing credit: a From Section 42U) (5) partnerships...................,... b Other than on line 24a. . . . . . . , . . . , . . . . . . . . . . . 25 Supplemental information required to be reported separately to each partner (attach additional schedules if more space is needed): 23-271353~ 14a Interest expense on investment debts. . b (1) Investment income included on lines 4a, 4b, 4c, and 4f, (2 Investment ex enses included on line 10 . 15a Net earnings (loss) from self-employment. . . , b Gross farming or fishing income. , . . . . . , c Gross nonfarm income. . . . . 14a 14b 1 14b 2 15a 15b 15c 16a 16b 16c 16d 1 16d(2) 16e 17b 17c 17d(1) 17d(2) 17 d(3) !ikWfmWm~mm LINE 2 RENTAL REAL ESTATE ACTIVITIES PROPERTY DESCRIPTION PARK AND TOWNHOUSE RENTAL GROSS INCOME NET EXPENSES 17,245. 17,945. $ TOTAL $ PARTNER 27: M. GRACE WALTER PTPA0312L 01/01/02 184-12-4759 (b) Amount 322. -9,298. NET INCOME 4,000. Page 2 (c) 1040 filers enter the amount in column (b) on: Form 4952, line 1 161. J- See Partner's Instructions for Schedule K-l (Form 1065). Schedule SE, Section A or B See Partner's Instructions for Schedule K-1 (Form 1065). See Partner's Instructions for Schedule K-1 (Form 1065) and instructions for Form 6251. Form 1116, Part I Form 1116, Part II Form 1116, line 12. See Partner's Instructions for Schedule K.1 (Form 1065). Form 1040, line 8b See Partner's Instructions for Schedule K.1 (Form 1065). Form 8611, line 8 PASSIVE NON PASS SEC. 1231 TOTAL -700. PASSIVE -700. -2,630. Schedule K-l (Form 1065) 2001 STATEMENT 1 FORM 1065, SCHEDULE K, LINE 16E OTHER ADJUSTMENTS AND TAX PREFERENCE ITEMS A.C.E. ADJUSTED GAIN OR LOSS......... . .. . . . . . . . . . $ TOTAL $ STATEMENT 2 FORM 1065, SCHEDULE L, LINE 6 OTHER CURRENT ASSETS ADVANCE, AFFILIATE... PREPAID EXPENSES. BEGINNING .. .. .. .. ... ................. ....... $ 4, 000. $ ................... . 9,369. TOTAL r- 13,369. $ STATEMENT 3 FORM 1065, SCHEDULE L, LINE 8 OTHER INVESTMENTS BEGINNING STOCK IN PENNSVIEW WATER CO.............................. ........... .$ 50,000. $ TOTAL r- 50,000. $ STATEMENT 4 FORM 1065, SCHEDULE L, LINE 13 OTHER ASSETS SYNDICATION COSTS.................................... BEC;INNING ...........$ 75,492. $ TOTAL ~ 75,492. $ STATEMENT 5 FORM 1065, SCHEDULE L, LINE 17 OTHER CURRENT LIABILITIES PREPAID RENTS... SECURITY DEPOSITS. BEC;INNING 5,905. $ 15,660. TOTAL ~ 21,565. $ ......$ -70. -70. ENDING 4,000. 5,074. 9,074. ENDING 50,000. 50,000. ENDING 75,492. 75,492. ENDING 7,980. 9,430. 17,410. STATEMENT 6 FORM 8825, LINE 15 OTHER EXPENSES PROPERTY A: PARK AND TOWNHOUSE RENTAL - SElINSGROVE, PA PROPERTY B: - PROPERTY C: - PROPERTY D: - PROPERTY A PROPERTY B PROPERTY C PROPERTY D AMORTIZATION.... ..................... $ 2,234. ASSOCIATION DUES.... 2,243. lICENSES AND PERMITS. .......... 59. MANAGEMENT FEES.... ..................... 4,790. OFFICE EXPENSE......... ......... 274. POSTAGE.......... ......... ........... 481. SUPPLIES ... ............................. 86. TELEPHONE....................................... 11. TOTAL $ 10,178. SUSQUEHANNA VALLEY PARTNERS P.O. BOX 151 ELIZABETHTOWN, P A 17022 (717) 367-7822 June 28,2006 Estate of Mary G. Walter John D. Walter, Executor c/o Peter 1. Ressler Box 5950 Hanisburg, PAl 711 0 Dear Mr. Walter: Mary G. Walter owned 7.92% of Susquehanna Valley Partners, a limited partnership, which operates an eighty-two (82) pad mobile home park in Selinsgrove, P A. The 7.92% ownership represents four (4) units in the partnership. The last unit sold was effective January 1,2006 and the selling price was $15,000. Based upon this sale price Mary's ownership in this partnership was worth approximately $60,000. Sincerely, ,.~-'? ~ Ronald L. Felty, General Partner ~ ADAMSCOlJNIYNA_..ONALBANK& FARMERS NATIONAl, BANK OF NEWVILLE A l.hl'l'ltJ!I tJ//1d,t11U (:{i,'II') 'v,lfIOlJdj Nan}.: CHECKING STATEMENT Statement Date: 10/31/05 Account #: 187054 Page 1 801 JOHN F WALTER ESTATE %M GRACE WALTER 137 BIRCH TREE CIRCLE NEWVILLE PA 17241 Don't Get Burned. Stay Cool with a Fixed Home Equity Line. Rising interest rates are making a lot of people sweat. But you can relax if you've got a home equity line that's fixed. stop by one of our offices or contact us today at 1.888.334.ACNB. Equal Housing Lender. Equal opportunity Lender. Member FDIC. ****Free Gas/Gift card with new credit lines of $25,000 or more.**** ESTATE CHECKING Account # 187054 Account Summary Previous Statement Balance + Deposits and Other Credits - Checks Paid or Other Debits - Service Charges + Interest Paid Ending Balance Days in Statement Period 07/31/05 1 Beginning Balance $77,456.65 A.ctivity Ending Balance 951. 75 .00- .00- .00 $78,408.40 92 Account Detail 10-17 10-31 Activity Description BEGINNING BALANCE CUSTOMER DEPOSIT ENDING BALANCE De pos its/C red its CheckslDebits Balance Date 951. 75 77,456.65 78,408.40 78,408.40 END OF STATEMENT Po. Box 3129, Gettysburg, PA 17325 · 888/334-ACNB (2262) vvww.acnb.com ~ ADAMS COUNIY NATI01\AI" BANK January 13,2006 Mette, Evans & Woodside Attorneys at Law 3401 North Front St PO Box 5950 Harrisburg, PAl 711 0 Re: Estate ofM. Grace Walter Dear Mr. Ressler: The following information is being provided as per your request: Acct. Type Account Account Accrued Ownership Date Date Joint No. Principal on Interest to Opened 0.0.0. 0.0.0. Checking 224871 $32,189.87 $.44 John 0 Walter 4-15-99 4-30-02 Checking 224898 $116,863.92 $1.60 Individual 4-15-99 N/A * *There was an estate account in which Grace was handling. The account # 187054 was titled John F Walter Estate. The balance at the time of her death was $78,408.40. This account was opened 5-6-99. Inquiries concerning ACNB Corporation stock information should be directed to the Registrar and Transfer Company at 1-800-368-5948. If you need any additional information, please contact me at (717)339-5116. Sincerely, --A~ h ~1~ Lois Kime Deposit Services PO Box 3129, GnHsnURG, PA 17125 I PIIONF 717.334.316] I TOLl IRE I 888.3342262 I w\\'w.acnb.com INDIAN RIVER NATION BANK 958 20th Place Vero Beach, FL 32960 M GRACE WALTER 137 BIRCHTREE CIRCLE NEWVILLE PA 17241-9001 IUNIl .........iiiiL -.... iiiiiii'~ The Real Conununily Bank INDIAN RIVER NATIONAL BANK Date 9/26/05 Primary Account Enclosures Page 1 163279501 " "R E ALE A S Y" 24 HOUR TOUCH TONE BANKING SYSTEM PHONE NUMBERS * * (772) 563-2500 Indian River County * * * * (321) 956-8085 Brevard County * * CHECKING ACCOUNTS FRAUD WARNING: Fraudulent calls attempt to gain your personal info (account no., soc see no., drlvers lic.,etc) Do NOT give out confidential information to callers. INDIAN RIVER GOLD NOW Account Number Previous Balance Deposits/Credits Checks/Debits Periodic Fees Interest Paid Current Balance Activity in Date Order Date Description 9/26 Interest Deposit Statement Code Summary Code Description CR ACH Deposit 163279501 1,758.67 .00 .00 .00 .16 1,758.83 Number of Enclosures Statement Dates 8/25/05 thru Days in the statement period Average Ledger Average Collected Interest Earned Annual Percentage Yield Earned 2005 Interest Paid Trace No Amount .16 CR Interest Rate Summary Date Rate 8/24 0.1000% * * * END o F S TAT E MEN T * * * o 9/26/05 33 1,758.67 1,758.67 .16 0.10% 1. 34 Balance 1,758.83 ~ F:DJe G) NOTE: SEE REVERSE SIDE FOR IMPORTANT INFORMATION Nov 09 05 02:04p Ra~ I<elle~ 717 652 3530 p.::J Account summary Page 1 of] _....____.__.__,__~______~____~___~_A_.__~_______._______'__'__'_'~'_ -~---""---~'------'--'---"""---l '1M nthl clooin- r~t .c ""'-$ ~nn 'l) @.ArneriClin Fwuht .__,_n~_____'__'__"__~______' ._.____............~_.~,__._w__.______~~._~_.._____.___..,_~_._.~_-_._._~_._-.--,---~-~_.., I -.----.~....------.-.---l i Account Summary Total value~ $30,401.90 (Prices as of 11/08/05) M GRACE WALTER & JOHN 0 WALTER & SHIRLEY BRAMOT JT WROS Account; 64862157 -,-_._.---_._-,--~-----::~-~.~----_._'---~--_.~--------_.._.-_._~...~.._--_.. Fund Fund NAV Shares number Available The Cash Management Trust of America - A 9 $1.00 30,401.900 $30,401.90 I I I L___~_-_____ Total value: (Prices as of: 11/08/05) $30,401.90 _..d!JIlII .. 'V we: iii ar -_ __1 Melli:: lNC!bNJ:l. ~iftlllJ11 I ..M!...d.:.,'tl;~ l U~__ &! ~~ Total value: $30,401.90 ___~__'____________"".____ __~_..__~____--.J t.....M .//""",,,') !>n1#"rir:::Infunds.comlbob/account/account-summary-print.htm?sid"" Dy M9vT s.., 11/9/2005