Marvin W. and Kathryn A. McPike - Page 7

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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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