Investment Engineers, LTD., Robert S. McGlamery, A Partner Other than the Tax Matters Partner - Page 4

                                                 - 4 -                                                    
            notes totaling $159,990.  Two other limited partners contributed                              
            cash of $2,500 and $4,000 and notes of $12,500 and $20,000,                                   
                  The notes executed by the limited partners were due over a                              
            period of approximately 11 years, with the first payment due on                               
            May 1 of the year following the date on which the note was                                    
            executed and with additional annual payments commencing on                                    
            December 1 of the fifth year after the note was executed.                                     
                  In the prospectus for the partnership, the benefits to the                              
            limited partners were described as follows:                                                   
                  (1) 6:1 Write Off - An investor may be able to deduct                                   
                        from his taxable income in 198_ six times the                                     
                        amount of his cash contribution made during the                                   
                        first year of partnership operations.                                             
                  (2) Capital Gains Treatment of Profits - Investors may                                  
                        only have to report 40% of profits from the                                       
                        partnership in their taxable incomes.                                             
                  (3) High Profit Potential - If 4,100 customers are                                      
                        obtained by year 5, and retained at a royalty of                                  
                        $250 per year to the partnership, each investor                                   
                        can expect an average annual after tax return of                                  
                        up to 45% of his initial investment.                                              
            Nothing in the prospectus described how the software to be                                    
            developed by the partnership would be manufactured, distributed,                              
            or marketed.  Under the heading “Risk Factors”, the prospectus                                
            stated, in part, the following:                                                               
                        The proposed researchers appear to have the                                       
                  skills, experience and commitment to produce the                                        
                  product ordered by the partnership.  However, in the                                    
                  Investment Engineers, LTD. project, there are no funds,                                 
                  neither can there be funds (without loss of tax                                         

Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  Next

Last modified: May 25, 2011