Mark Friedman - Page 6

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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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