- 28 -
and $39,162, respectively. For his $12,500 investment in
Clearwater, Friedman claimed an operating loss in the amount of
$10,002, and investment tax and business energy credits in the
amount of $9,29010 on his 1981 return. As a result of Alter's
$12,500 investment in Poly Reclamation, on their 1981 return he
and his wife Deborah claimed an operating loss in the amount of
$9,976 and investment tax and business energy credits totaling
$21,584.
The investment tax and business energy credits generated by
the Partnerships and available to petitioners equaled 173 percent
of their cash investments. Therefore, after adjustments of
withholding, estimated tax, or final payment, and possible
carryback or carryover in Friedman's case, like the taxpayers in
Provizer v. Commissioner, T.C. Memo. 1992-177, "except for a few
weeks at the beginning, petitioners never had any money in the *
* * [Partnership transactions]." In view of the
disproportionately large tax benefits claimed on petitioners'
Federal income tax returns, relative to the dollar amounts
invested, further investigation of the Partnership transactions
clearly was required. A careful consideration of the materials
10 As noted, the total amount of investment tax and business
energy credits flowing from Clearwater to Friedman in 1981--
$21,584--was subject to limitation.
Page: Previous 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 NextLast modified: May 25, 2011