Philip H. and Anna Friedman - Page 14

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                  Petitioner did, however, enjoy the benefits of traveling to                              
            resorts in connection with gambling activities, and some of that                               
            travel was lavish.  The amount of travel was about the same,                                   
            before, during, and after the tax years for which the grossly                                  
            erroneous deductions were claimed.                                                             
                  Philip's reported gross income, without considering                                      
            deductions or the grossly erroneous amounts, ranged from a low of                              
            $297,982 to a high of $1,264,674 from 1981 through 1985.  The                                  
            record reflects that his reported income in other years was                                    
            similar in amount.  His income fluctuated due to the nature of                                 
            his business activity--mortgage broker.  That amount of income                                 
            would have provided petitioners with a high standard of living                                 
            without considering the tax savings generated by the tax shelter                               
            in question.  A substantial portion of the tax savings was likely                              
            consumed by Philip's gambling losses.  About $700,000 of tax                                   
            savings is attributable to the grossly erroneous deductions                                    
            generated by the subject tax shelter.  During the same period,                                 
            Philip's gambling activity consumed as much as $650,000.  In                                   
            subsequent years, Philip's gambling activity appears to have                                   
            increased, and his losses also likely increased, ultimately                                    
            ending in the conflict with petitioner that led to separation                                  
            and, allegedly, to divorce.  Our record does not reflect whether                               
            petitioner and Philip were actually divorced, but references to                                
            the divorce appear in the appellate briefs connected with this                                 
            case.  We are also unaware of the ultimate divorce settlement,                                 




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