This letter provides information relating to the amount and character of the income, gain, loss, deductions and basis adjustment (Tax Items) of the City Investing Company Liquidating Trust (Trust) for 1986. You should use this information in preparing your 1986 U.S. Federal income tax return.

If you (i) acquired Trust Units (Units) upon the liquidation of City Investing Company, (ii) reported long-term capital gain or loss upon the liquidation and (iii) did not dispose of any Units in 1986, you can calculate on the Schedule your share of the Trust Tax Items by multiplying the Amount per Unit [Column IA] of each Tax Item by the Number of Units you held [Column IB] and entering the product under the Taxable Amount [Column IC].

If you (i) disposed of Units in 1986 or (ii) acquired your Units other than upon the liquidation of City Investing Company or (iii) did not report long-term capital gain or loss upon the liquidation, you will probably have different income tax consequences that cannot readily be calculated by the Trust. For administrative convenience, you may calculate your share of the Trust Tax Items by (i) multiplying the Amount per Unit [Column A] of each Tax Item by the Number of Units you held [Column B] on the first day of each month applicable to your holding period, (ii) entering the product under the Taxable Amount [Column C] and (iii) entering the sum of the amounts in Columns IIC through XIIIC, if any, in Column XIV.

Individual taxpayers may report on Form 1040 the amounts of Tax Items computed for Federal income tax purposes as follows:

	Tax Item 1.		Interest Income--line 2, Schedule B
	Tax Item 2.		Net Short-Term Capital Gain --line 5, Schedule D
	Tax Item 3.		Net Long-Term Capital Gain / (Loss)--line 12, Schedule D
	Tax Item 4.		Other Ordinary Income --line 22
	Tax Item 5.		Trust Expenses -- line 22, Schedule A, (if you itemize deductions)
	Tax Item 6.		Trust Distributions -- are not includable in taxable income
	Tax Item 7.		Foreign Source Items -- You may claim the amount of Foreign Tax Withheld (Tax Item 7e) as a deduction on Line 9, Schedule A (if you itemize deductions) or foreign tax credit on Form 1116 (Computation of Foreign Tax Credit). Tax Items 7a through 7d are provided for information purposes.
	Tax Item 8.		Adjustment to Basis--for information purposes

THIS LETTER IS NOT INTENDED TO PROVIDE INCOME TAX ADVICE RELATING TO THE ACQUISITION, HOLDING AND DISPOSITION OF UNITS. YOU ARE STRONGLY ENCOURAGED TO DISCUSS THE INCOME TAX CONSEQUENCES OF ACQUIRING, HOLDING AND DISPOSING OF UNITS WITH YOUR TAX ADVISOR.

February 27, 1987

1

	II
	January
	A	x	B	=	C
	Amount
	per		No. of		Taxable
	Unit	x	Units	=	Amount o
TAX ITEM:*
1. Interest Income	.017120	x		=
2. Net Short-Term Capital Gain	.003954	x		=
3. Net Long-Term Capital Gain / (Loss)	(.003702)	x		=
4. Other Ordinary Income	.001742	x		=
5. Trust Expenses	.002994	x		=
6. Trust Distributions	----
7. Foreign Source Items:
a)Net Short-Term Capital Gain	----
b)Net Long-Term Capital Gain / (Loss)	(.001485)	x		=
c)Ordinary Income	----
d)Ordinary Expense	.000228	x		=
e)Foreign Tax Withheld	----
8. Adjustment to Basis
Tax Items (1+2+3+4-5-6-7e)	.016120	x		=

	III
	February
	A	x	B	=	C
	Amount
	per		No. of		Taxable
	Unit	x	Units	=	Amount o
TAX ITEM:*
1. Interest Income	.005472	x		=
2. Net Short-Term Capital Gain	.011857	x		=
3. Net Long-Term Capital Gain / (Loss)	(.012421)	x		=
4. Other Ordinary Income	.002362	x		=
5. Trust Expenses	.002498	x		=
6. Trust Distributions	----
7. Foreign Source Items:
a)Net Short-Term Capital Gain	.011650	x		=
b)Net Long-Term Capital Gain / (Loss)	.003207	x		=
c)Ordinary Income	----
d)Ordinary Expense	.000069	x		=
e)Foreign Tax Withheld	----
8. Adjustment to Basis
Tax Items (1+2+3+4-5-6-7e)	.004772	x		=

	IV
	March
	A	x	B	=	C
	Amount
	per		No. of		Taxable
	Unit	x	Units	=	Amount o
TAX ITEM:*
1. Interest Income	.007596	x		=
2. Net Short-Term Capital Gain	.000155	x		=
3. Net Long-Term Capital Gain / (Loss)	(.009008)	x		=
4. Other Ordinary Income	.000081	x		=
5. Trust Expenses	.002114	x		=
6. Trust Distributions	----
7. Foreign Source Items:
a)Net Short-Term Capital Gain	----
b)Net Long-Term Capital Gain / (Loss)	(.000044)	x		=
c)Ordinary Income	----
d)Ordinary Expense	.000282	x		=
e)Foreign Tax Withheld	----
8. Adjustment to Basis
Tax Items (1+2+3+4-5-6-7e)	(.003290)	x		=

	V
	April
	A	x	B	=	C
	Amount
	per		No. of		Taxable
	Unit	x	Units	=	Amount o
TAX ITEM:*
1. Interest Income	.004865	x		=
2. Net Short-Term Capital Gain	----
3. Net Long-Term Capital Gain / (Loss)	(.005174)	x		=
4. Other Ordinary Income	.000213	x		=
5. Trust Expenses	.005520	x		=
6. Trust Distributions	.250000	x		=
7. Foreign Source Items:
a)Net Short-Term Capital Gain	----
b)Net Long-Term Capital Gain / (Loss)	(.000352)	x		=
c)Ordinary Income	----
d)Ordinary Expense	.000308	x		=
e)Foreign Tax Withheld	----
8. Adjustment to Basis
Tax Items (1+2+3+4-5-6-7e)	(.255616)	x		=

	VI
	May
	A	x	B	=	C
	Amount
	per		No. of		Taxable
	Unit	x	Units	=	Amount o
TAX ITEM:*
1. Interest Income	.006952	x		=
2. Net Short-Term Capital Gain	----
3. Net Long-Term Capital Gain / (Loss)	.557498	x		=
4. Other Ordinary Income	.001930	x		=
5. Trust Expenses	.006610	x		=
6. Trust Distributions	----
7. Foreign Source Items:
a)Net Short-Term Capital Gain	----
b)Net Long-Term Capital Gain / (Loss)	.109470	x		=
c)Ordinary Income	----
d)Ordinary Expense	----
e)Foreign Tax Withheld	----
8. Adjustment to Basis
Tax Items (1+2+3+4-5-6-7e)	(.559770)	x		=

	VII
	June
	A	x	B	=	C
	Amount
	per		No. of		Taxable
	Unit	x	Units	=	Amount o
TAX ITEM:*
1. Interest Income	.011618	x		=
2. Net Short-Term Capital Gain	----
3. Net Long-Term Capital Gain / (Loss)	.030282	x		=
4. Other Ordinary Income	.000051	x		=
5. Trust Expenses	.001362	x		=
6. Trust Distributions	.666439	x		=
7. Foreign Source Items:
a)Net Short-Term Capital Gain	----
b)Net Long-Term Capital Gain / (Loss)	.041748	x		=
c)Ordinary Income	.000586	x		=
d)Ordinary Expense	.000126	x		=
e)Foreign Tax Withheld	----
8. Adjustment to Basis
Tax Items (1+2+3+4-5-6-7e)	(.625850)	x		=

	VIII
	July
	A	x	B	=	C
	Amount
	per		No. of		Taxable
	Unit	x	Units	=	Amount o
TAX ITEM:*
1. Interest Income	.028694	x		=
2. Net Short-Term Capital Gain	----
3. Net Long-Term Capital Gain / (Loss)	(.005748)	x		=
4. Other Ordinary Income	.000044	x		=
5. Trust Expenses	.002228	x		=
6. Trust Distributions	----
7. Foreign Source Items:
a)Net Short-Term Capital Gain	----
b)Net Long-Term Capital Gain / (Loss)	.001638	x		=
c)Ordinary Income	.000390	x		=
d)Ordinary Expense	----
e)Foreign Tax Withheld	.000058	x		=
8. Adjustment to Basis
Tax Items (1+2+3+4-5-6-7e)	.020974	x		=

	IX
	August
	A	x	B	=	C
	Amount
	per		No. of		Taxable
	Unit	x	Units	=	Amount o
TAX ITEM:*
1. Interest Income	.010399	x		=
2. Net Short-Term Capital Gain	----
3. Net Long-Term Capital Gain / (Loss)	.019380	x		=
4. Other Ordinary Income	.000337	x		=
5. Trust Expenses	.004858	x		=
6. Trust Distributions	----
7. Foreign Source Items:
a)Net Short-Term Capital Gain	----
b)Net Long-Term Capital Gain / (Loss)	(.000308)	x		=
c)Ordinary Income	----
d)Ordinary Expense	----
e)Foreign Tax Withheld	----
8. Adjustment to Basis
Tax Items (1+2+3+4-5-6-7e)	.025258	x		=

	X
	September
	A	x	B	=	C
	Amount
	per		No. of		Taxable
	Unit	x	Units	=	Amount o
TAX ITEM:*
1. Interest Income	.011491	x		=
2. Net Short-Term Capital Gain	.000005	x		=
3. Net Long-Term Capital Gain / (Loss)	(.007305)	x		=
4. Other Ordinary Income	.003032	x		=
5. Trust Expenses	.001886	x		=
6. Trust Distributions	----
7. Foreign Source Items:
a)Net Short-Term Capital Gain	----
b)Net Long-Term Capital Gain / (Loss)	(.000286)	x		=
c)Ordinary Income	.000027	x		=
d)Ordinary Expense	.000155	x		=
e)Foreign Tax Withheld	----
8. Adjustment to Basis
Tax Items (1+2+3+4-5-6-7e)	.005337	x		=

	XI
	October
	A	x	B	=	C
	Amount
	per		No. of		Taxable
	Unit	x	Units	=	Amount o
TAX ITEM:*
1. Interest Income	.008741	x		=
2. Net Short-Term Capital Gain	----
3. Net Long-Term Capital Gain / (Loss)	.000598	x		=
4. Other Ordinary Income	.001050	x		=
5. Trust Expenses	.011298	x		=
6. Trust Distributions	----
7. Foreign Source Items:
a)Net Short-Term Capital Gain	----
b)Net Long-Term Capital Gain / (Loss)	(.000018)	x		=
c)Ordinary Income	----
d)Ordinary Expense	----
e)Foreign Tax Withheld	----
8. Adjustment to Basis
Tax Items (1+2+3+4-5-6-7e)	(.000909)	x		=

	XII
	November
	A	x	B	=	C
	Amount
	per		No. of		Taxable
	Unit	x	Units	=	Amount o
TAX ITEM:*
1. Interest Income	.008915	x		=
2. Net Short-Term Capital Gain	----
3. Net Long-Term Capital Gain / (Loss)	(.001603)	x		=
4. Other Ordinary Income	.000074	x		=
5. Trust Expenses	.005102	x		=
6. Trust Distributions	----
7. Foreign Source Items:
a)Net Short-Term Capital Gain	----
b)Net Long-Term Capital Gain / (Loss)	(.000170)	x		=
c)Ordinary Income	----
d)Ordinary Expense	.000420	x		=
e)Foreign Tax Withheld	----
8. Adjustment to Basis
Tax Items (1+2+3+4-5-6-7e)	.002284	x		=

	XIII
	December
	A	x	B	=	C
	Amount
	per		No. of		Taxable
	Unit	x	Units	=	Amount o
TAX ITEM:*
1. Interest Income	.151753	x		=
2. Net Short-Term Capital Gain	----
3. Net Long-Term Capital Gain / (Loss)	.007410	x		=
4. Other Ordinary Income	.000078	x		=
5. Trust Expenses	.002398	x		=
6. Trust Distributions	----
7. Foreign Source Items:
a)Net Short-Term Capital Gain	----
b)Net Long-Term Capital Gain / (Loss)	.003241	x		=
c)Ordinary Income	----
d)Ordinary Expense	.000344	x		=
e)Foreign Tax Withheld	.000116	x		=
8. Adjustment to Basis
Tax Items (1+2+3+4-5-6-7e)	.156727	x		=

	XIV
	Total if held on some,but not
	all, first days of each month
	IIC + IIIC + IVC + VC + VIC +
	VIIC + VIIIC + IXC +
	XC + XIC + XIIC + XIIIC
	Taxable Amount !
TAX ITEM: *
1. Interest Income
2. Net Short-Term Capital Gain
3. Net Long-Term Capital Gain / (Loss)
4. Other Ordinary Income
5. Trust Expenses
6. Trust Distributions
7. Foreign Source Items:
a)Net Short-Term Capital Gain
b)Net Long-Term Capital Gain / (Loss)
c)Ordinary Income
d)Ordinary Expense
e)Foreign Tax Withheld
8. Adjustment to Basis
Tax Items (1+2+