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cannot act as your offeree representative. You should
seek guidance from a tax attorney or CPA who is
qualified to give you advice in this matter.
The report also notified petitioner that HG&C would “endeavor to
keep * * * [him] informed of developments as they occur with
Madison Recycling” so that petitioner believed HG&C would alert
him if something went wrong with the Madison investment.
After the spring of 1983, petitioner received documents from
Madison, including reports from RRI on how many pounds of
polystyrene were bought, processed, and sold. To monitor his
investment, petitioner kept in touch with HG&C and read the
reports. From the spring of 1983 through 1987, however,
petitioner took no action regarding his investment, even though
Madison was performing poorly.
Madison’s and Petitioner’s Tax Returns
On March 14, 1983, Madison filed its Form 1065, U.S.
Partnership Return of Income, for 1982. Madison reported that
the four recyclers had an aggregate basis of $7 million, or
$1,750,000 each, for purposes of investment and energy tax
credits. Madison also reported a net ordinary loss of $704,111.
Petitioner’s allocable share of the bases, credits, and losses
was passed through to him and reported on a Schedule K-1,
Partner’s Share of Income, Credits, Deductions, etc. - 1982.
Petitioner received his Schedule K-1 from Mr. Roberts on or
around February 1, 1983. Petitioner reviewed the Schedule K-1
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