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favorable letter from an attorney, Alois E. Lemke. This letter
stated that investors in the container leasing program would be
able to qualify for tax credits and depreciation write-offs.
Petitioners did not contact another attorney, accountant, or any
other individual to verify this information.
Lukensow set up a partnership called Kathmar Company in
which petitioners each held a 50-percent interest. Through
Kathmar, petitioners invested in GD&L's container leasing
program. Petitioners did not understand the nature or purpose of
the partnership, and Lukensow did not explain its function or
operation due to its alleged complexity.
On August 16, 1983, petitioners purchased 20 units3 of
containers for $200,000.4 The terms of the purchase required a
downpayment of $9,900, and GD&L purportedly arranged the
financing for the remaining $190,100, for which petitioner signed
promissory notes. As part of the agreement, petitioners agreed
to appoint GD&L as their non-exclusive agent for the purposes of
leasing the containers. GD&L agreed to act as the leasing agent
for petitioners for 35 months and to use its best efforts to
3 According to the Container Purchase and Lease
Agreement, each unit represented one 40-foot container "valued
at" $4,000 and three 20-foot containers "valued at" $2,000.
4 Most of the documentation contained in the stipulation
of facts reflects only the purchase of 10 units, while the 1983
tax return reflects a total cost of $200,000. Moreover, the
amount of the investment tax credit (ITC) claimed therein,
carried back to 1980 and 1981, and at issue herein, is based upon
a $200,000 alleged cost.
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