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supra. Indeed, Grelsamer testified that when he reviewed the SAB
Reclamation offering memorandum he thought that the "mathematics
looked terribly good, maybe too good."
In each case, the projected tax benefits in the offering
memoranda exceeded petitioners' respective investments.
According to the offering memoranda, for each $50,000 investor,
the projected first-year tax benefits were investment tax credits
in excess of $82,500 plus deductions in excess of $40,000.
Specifically, the projected investment tax credits and deductions
for the Partnerships in the first year of the investment, for
each $50,000 investor, were as follows: $82,639 and $40,376,
respectively, for Plymouth in 1981, and $83,712 and $40,234,
respectively, for SAB Reclamation in 1982.
For Grelsamer's gross $25,000 investment, the Grelsamers
claimed an operating loss in the amount of $20,050 and investment
tax and business energy credits in the amount of $41,856 for
taxable year 1982. As a result of his $50,000 investment, Morgan
claimed a $40,554 operating loss and $82,526 in investment tax
and business energy credits for taxable year 1981. The direct
reductions in petitioners' Federal income tax, from the
investment tax credits alone, ranged from 165 percent to 167
percent of their cash investments, without taking into
consideration any rebated commissions or advance royalty
payments. Therefore, after adjustments of withholding, estimated
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