Paul L. and Doris J. Triemstra, et al. - Page 19

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               While the three petitioners paid cash of $16,500, their                
          total investment credit and business energy credits were $31,098,           
          and they claimed total operating losses of $14,916 in 1981 alone.           
          On their 1981 tax returns, Triemstra and Cohn each claimed a                
          qualified investment with an unadjusted basis of $56,542, and               
          Kravitz claimed such an investment of $42,407.  The three                   
          partners in Bellvine claimed a total qualified investment with a            
          basis of $155,491.  With respect to the significance of the full            
          investment, see Anderson v. Commissioner, 62 F.3d 1266 (10th Cir.           
          1995), affg. T.C. Memo. 1993-607.                                           
               Petitioners further contend that their failure to look                 
          beyond the Northeast offering memorandum was reasonable.                    
          Petitioners argue:  (1) It was reasonable for them not to look              
          beyond the offering memorandum but to accept its representations            
          at face value because Federal and State securities laws                     
          discourage false or misleading statements, and (2) petitioners'             
          familiarity with offering memoranda reasonably led them to                  
          believe that the cautionary language contained in the Northeast             
          offering memorandum was for the exclusive benefit of the promoter           
          and could therefore be disregarded.                                         
               Kravitz read the entire Northeast offering memorandum.  The            
          memorandum, and particularly the projections of anticipated                 
          business profits, supposedly convinced Kravitz that the Northeast           
          transaction was a real business proposal.  Kravitz did not check            
          the figures in the offering memorandum or verify the charts with            

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