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rejecting advice from such persons. Neither Miller or Roberts
knew anything about plastics or plastics recycling. The
evaluators whose reports were appended to the offering memorandum
each owned interests in partnerships which leased Sentinel EPE
recyclers. The offering memorandum contained numerous caveats,
including the following: NO OFFEREE SHOULD CONSIDER THE CONTENTS
OF THIS MEMORANDUM *** AS *** EXPERT ADVICE. EACH OFFEREE SHOULD
CONSULT HIS OWN PROFESSIONAL ADVISERS. Petitioner did not see a
Sentinel EPE recycler prior to investing in Hyannis, and he
presented no evidence that he independently investigated the
recyclers.
Petitioner also contends that he did not know and could not
know of any comparable product by which to compare prices because
one did not exist. In fact, there were at least four other
plastics recycling machines available during 1981, ranging in
price from $20,000 to $200,000: Foremost Densilator,
Nelmor/Weiss Densification System (Regenolux), Buss-Condux
Plastcompactor, and Cumberland Granulators. See Provizer v.
Commissioner, supra. Moreover, petitioners stipulated that
information published prior to the plastics recycling
transactions indicated that several similar machines were already
on the market.
Petitioners did not have a reasonable basis for the adjusted
bases or valuations claimed on their 1981 return with respect to
their investment in Hyannis. Accordingly, respondent properly
found that petitioner's purported reliance on Miller, Roberts,
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