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the Arizona Medical Association, led a continuing medical
education (CME) accreditation program for local hospitals. The
underlying tax matter involved the taxpayer's investment in
Diabetics CME Group, Ltd., a limited partnership that invested in
the production, marketing, and distribution of medical
educational video tapes. The District Court found that the
taxpayer's personal expertise and insight in the underlying
investment gave him reason to believe it would be economically
profitable. Although the taxpayer was not experienced in
business or tax matters, he did consult with an accountant and a
tax lawyer regarding those matters. Moreover, the District Court
noted that the propriety of the taxpayer's disallowed deduction
therein was "reasonably debatable." Id. at 93-6447, 93-2 USTC
par. 50,585, at 89,895; see Zfass v. Commissioner, T.C. Memo.
1996-167.
In contrast, there is no showing in these cases that
petitioners or their colleagues had any personal insight or
industry know-how in plastics recycling that would reasonably
lead them to believe that the Plastics Recycling transactions
would be economically profitable.14 Feinstein spoke to Lauren,
14 Ferraro apparently worked for one or more summers at a
plastics company, and Carroll had an engineering background, but
neither Ferraro nor Carroll testified in these cases, and the
(continued...)
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