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FINDINGS OF FACT
Some of the facts have been stipulated in each case and are
so found. The stipulated facts and attached exhibits are
incorporated in the respective cases by this reference.
A. The Plastics Recycling Transactions
These cases concern petitioners' investments in two limited
partnerships that leased Sentinel expanded polyethylene (EPE)
recyclers: Clearwater Group (Clearwater) and Poly Reclamation
Associates (Poly Reclamation). Petitioner Friedman is a limited
partner in Clearwater, and petitioners Alter are limited partners
in Poly Reclamation. For convenience, we refer to these
partnerships collectively as the Partnerships.
The Clearwater partnership, and the transactions involving
the Sentinel EPE Recyclers leased by Clearwater, were considered
in Provizer v. Commissioner, supra. The transactions involving
the Sentinel EPE recyclers leased by Poly Reclamation are
substantially identical to the Clearwater transactions.
Petitioners have stipulated substantially the same facts
concerning the underlying transactions as we found in the
Provizer case.
In the Provizer case, Packaging Industries, Inc. (PI),
manufactured and sold six Sentinel EPE recyclers to ECI Corp. for
$981,000 each. ECI Corp., in turn, resold the recyclers to F & G
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