CORE: Daniel Rabia Chief Financial Officer 66 East 55th Street New York NY 10022 Id: Im: Ic: If: From: Kathleen Buzbee Sent: Monday, April 06, 2009 3:17 PM To: Daniel Rabia Subject: RE: Tax Returns et al Because Jennie is (was?) the managing member of the LLC's and had personally guaranteed loans, the debts were allocated to her K-I in 2005 which then created basis for her to take the losses. The losses created a net operating loss in her return which allowed her to file a claim for refund of previous taxes paid. The timing issue comes as follows- if, in the future, the Club reaches the point when it makes income it will be allocated to Jenny until it offsets all losses previously allocated to her. This income is then included in her personal return in the year received, and can then be offset by the normal itemized deductions. Kathleen F. Buzbee CPA/ABV, CVA, MST Principal Konowitz, Kahn & Company, P.C. 127 Washington Ave North Haven CT 06473-0190 Any tax advice contained in this communication (including any attachments) is not intended to be used, and cannot be used, for purposes of (i) avoiding penalties imposed under the United States Internal Revenue Code or (ii) promoting, marketing or recommending to another person any transaction or matter addressed herein. PRIVILEGED AND CONFIDENTIAL: This communication, including attachments, is for the exclusive use of addressee and may contain proprietary, confidential or privileged information. If you are not the intended recipient, any use, copying, disclosure, dissemination or distribution is strictly prohibited. If you are not the intended recipient, please notify the sender immediately by return email and delete this communication and destroy all copies. EFTA_R1_00195563 EFTA01822155