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tax and business energy credits totaling $57,898, and Sorey
deducted an operating loss in the amount of $8,945 and claimed
investment tax and business energy credits totaling $19,314.4
Wilson used $24,545 of the credits claimed with respect to his
investment in EI and Clearwater on his 1981 Federal income tax
return.5 Sorey used $4,805 of his claimed credits on his 1981
return and carried back the unused portion of the credits to 1978
and 1979 in the respective amounts of $10,021 and $4,488.
Respondent disallowed petitioners' claimed deductions and credits
related to EI's investment in Clearwater. In docket No. 7908-89,
respondent disallowed the entire loss claimed with respect to
Sorey's investment in EI.
EI is an Indiana limited partnership that was formed in May
of 1981 by Morton L. Efron (Efron) as the general partner and
Real Estate Financial Corp. (REFC) as the initial limited
partner. Fred Gordon (Gordon) is the president of REFC, which is
owned by members of Gordon's family.
4
On his 1981 Federal income tax return, Sorey claimed a
qualified investment for purposes of calculating the investment
tax credit in the amount of $96,628, $120 more than the purported
value of the Clearwater recyclers. Accordingly, Sorey claimed an
investment tax credit in the amount of $9,663. Respondent
disallowed Sorey's claimed investment tax credit in its entirety.
The record is unclear with respect to the additional $120 claimed
on Sorey's return.
5
The record does not disclose how or whether Wilson utilized
the remaining credits reported with respect to his investment in
EI.
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