- 22 -- 22 -
ZFH acquired a 4.479638-percent interest in SAB Recovery for
$50,000 in 1981 and a 2.538461-percent interest in SAB Recycling
for $25,000 in 1982, without taking into consideration any sales
commission rebates or advance royalty distributions.4 As a
general partner of ZFH, Fishbach is a second-tier owner of those
interests. Fishbach testified that during 1981 and 1982 he was
approximately a one-third partner in ZFH. As a result of
Fishbach's second-tier interests in SAB Recycling and SAB
Recovery, on their 1982 return Fishbach and his wife Patricia
claimed an operating loss in the amount of $7,230 and investment
tax and business energy credits in the amount of $13,743.5
Respondent disallowed the Fishbachs' claimed operating loss and
credits related to Fishbach's second-tier investments in SAB
Recycling and SAB Recovery.
4 ZFH also acquired an interest in SAB Recovery Associates in
1982, but the record in docket No. 19612-90 does not disclose the
size of the interest or how much ZFH paid for it. The record
indicates that SAB Recycling Associates was the subject of a
separate determination and proceedings, and that a decision has
since been entered with respect to that matter. The additions to
tax at issue in docket No. 19612-90 stem solely from the
Fishbachs' second-tier interests in SAB Recovery and SAB
Recycling.
5 The $7,230 loss and $13,743 in credits claimed by the
Fishbachs on their 1982 return is generally consistent with a
one-third interest in ZFH. The 1982 Form K-1, Partner's Share of
Income, Credits, Deductions, etc. issued by SAB Recycling for ZFH
reports an ordinary loss in the amount of $19,871, and a basis in
new recovery property, the Sentinel EPE recyclers, in the amount
of $206,597. $19,871/3 = $6,623.66. $206,597/3 = $68,865.66.
Applying the 10 percent investment tax credit and business energy
credit computations to $68,866 yields a combined credit of
$13,774 (68,866 x .1 = 6,886.6; 6,887 x 2 = 13,774). The record
does not permit more exact computations.
Page: Previous 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 NextLast modified: May 25, 2011