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Neither Bachmann or Abramson had any expertise in plastics
materials or plastics recycling. Abramson did not subscribe to
any professional journals in the field of plastics. While at the
PI plant in Hyannis, Abramson did not ask how much it cost to
manufacture a recycler, or whether, or for how much, the
recyclers were insured. Aside from his one visit to PI, Abramson
has never before or since visited a plant which manufactures
plastics recycling machinery. Abramson did not consult with an
independent expert in the field of plastics recycling.
1. Peter and Ursula Reimann, Docket No. 9915-86
Petitioners Peter and Ursula Reimann resided in New York,
New York, at the time their petition was filed. During 1981,
Peter Reimann (Reimann) was an executive salesman at R.B.S.
Fabrics, Ltd. (R.B.S.). His spouse, Ursula, was not employed
outside the home. On their 1981 Federal income tax return, the
Reimanns reported gross income from wages in the amount of
$147,500 and total taxable income of $119,980. Consequently, in
the absence of significant deductions or credits, in addition to
the partnership losses claimed in the computation of total
income, they were subject to payment of Federal income taxes in
substantial amounts.
In 1981, Reimann acquired a 2.538-percent interest in
Scarborough for his investment of $25,000. As a result of the
passthrough from Scarborough, on their 1981 Federal income tax
return, the Reimanns deducted an operating loss in the amount of
$19,833. They claimed $33,428 of a total of $41,312 of
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