You're missing parts of it because you're still printing half to the screen and half to the file.
IF LEFT$(LineTxt, 1) = "." THEN
PRINT CHR$(13); CHR$(13) 'HERE YOU ARE PRINTING TO THE SCREEN.
PRINT MID$(LineTxt, 2); " "; 'HERE TOO, THIS IS TO THE SCREEN
ELSE
WRITE #2, LineTxt 'write output to new file test.txt AND YET HERE IS TO THE FILE
PRINT LineTxt; 'prints output to screen
END IF
You'll need to convert all your print statements to the file, and not just part of them. ;)