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The brochure does, however, strongly emphasize the benefits to be
derived from the investment tax credit.
Also included in Century's promotional materials was a
"Legal Opinion" and a document entitled "Closing Documents".
The "Legal Opinion" totals 16 pages and is entirely devoted to
the tax consequences of entering into the Century Concepts
leasing program including the tax benefits, possible challenge by
the IRS, litigation, and the various Federal tax penalties that
may be applicable. The "Closing Documents" totals 20 pages of
which nine pages are devoted solely to tax considerations, one
page discusses how to lease a master, five pages consist of
sample tax forms, and the remainder consists of other sample
forms and a table of contents. In the "Closing Documents"
Century states that the fair market value of the masters equals
$375,000 and goes on to mention that the "the total write-off
[ratio] is approximately 4.9:1, based on the * * * [investment
tax credit] and total business expense write-offs."
There is no meaningful analysis contained anywhere in the
promotional materials of the potential nontax, economic
profitability of the Century Concepts leasing program. Also, the
materials are devoid of any information of substance regarding
the marketability of the masters, or any information concerning
how master video games can be marketed.
On December 20, 1983, petitioner entered into an equipment
lease with Century Concepts for the lease of a master video game
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