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the course of his practice, Alter advised his clients whether to
consider such investments.
Alter acquired a 1.547-percent interest in Poly Reclamation
for $12,500 in 1981. As a result of his investment in Poly
Reclamation, on their joint 1981 Federal income tax return Alter
and his wife Deborah claimed an operating loss in the amount of
$9,976, and investment tax and business energy credits totaling
$21,584.5 Respondent disallowed the Alters' claimed operating
loss and investment tax and business energy credits flowing from
Poly Reclamation.
Alter learned of the Plastics Recycling transactions from
Hirshfield, who in turn had been introduced to the transactions
by Winer. Alter understood that Hirshfield previously had done
business with Winer and thought well of him. Alter read the Poly
Reclamation offering memorandum and attended some meetings with
other Shea & Gould partners who were considering an investment in
the Plastics Recycling transactions, including Hirshfield,
Carroll, Ferraro, Trost, and Parker. He understood that Carroll
had a background in engineering, and that Ferraro, who at the
time represented British Petroleum, had worked at a plastics
5 Alter and his wife claimed an additional $1,046 in regular
investment credits from other qualifying property on their 1981
return.
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