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$10,000 in 1981.4 As a result of his second-tier interest in SAB
Recovery, on their 1981 return petitioners claimed an operating
loss in the amount of $7,940 and investment tax and business
energy credits totaling $16,508. Petitioners also claimed a $458
loss from SAB Recovery on their 1982 return. In 1982, petitioner
acquired a second-tier, approximately 1.8-percent5 interest in
SAB Reclamation--through the partnership V & L Equities--for
$10,000.6 As a result of his second-tier interest in SAB
4 The record does not directly disclose petitioner's percentage
interest in SAB Recovery. Petitioner testified that he invested
$10,000, through Resource Partners, in SAB Recovery. Attached to
the 1981 Partnership return of SAB Recovery is a Schedule K-1,
Partner's Share of Income, Credits, Deductions, etc, of an
individual who invested $10,000 in SAB Recovery. For $10,000,
that limited partner acquired a 0.895928-percent interest in SAB
Recovery. The amount of SAB Recovery's operating loss allocated
to that partner was $7,940, and the amount of basis allocated to
that partner was $82,537, which results in a combined investment
and business energy credit in the amount of $16,508. ($82,537 x
10% = $8,254. $8,254 x 2 = $16,508). Those figures are
consistent with the loss and credits claimed by petitioners on
their 1981 income tax return.
5 The record does not directly disclose petitioner's
percentage interest in SAB Reclamation. However, on its 1982
partnership return, SAB Reclamation reported a loss in the amount
of ($445,560), and a basis in the recyclers in the amount of
$4,650,668. Petitioner was allocated a loss in the amount of
($8,021), and a basis in the recyclers in the amount of $83,712.
(($8,021)/($445,560) = 0.018002. 0.018 x $4,650,668 =
$83,712.02).
6 The record does not directly disclose the amount that
petitioner invested in V & L Equities for his second-tier
interest in SAB Reclamation. However, the Schedule K-1 for V & L
Equities for 1982, attached to the SAB Reclamation partnership
return, shows that V & L Equities acquired a 9-percent interest
in SAB Reclamation for $50,000. Petitioner had a 1.8-percent
second-tier interest in SAB Reclamation. (0.018/0.09 = 0.2. 0.2
x $50,000 = $10,000).
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