G. Dastgir and Mary A. Qureshi - Page 4

          Pennsylvania (Budd Co.) manufactured the containers. The                    
          refrigerated containers controlled the atmosphere for post-harvest          
          preservation and transportation of perishable agricultural                  
          commodities. In 1982, FoodSource sold a container for $260,000.             
               Petitioner was introduced to the FoodSource program through            
          Skip Stewart, who received a commission for each container sold.            
          Among other things, Mr. Stewart informed petitioner of the                  
          potential tax advantages petitioner could expect to receive from an         
          investment in the FoodSource program.                                       
               FoodSource supplied petitioner with information about its              
          containers and program.  Petitioner engaged a Richmond, Virginia,           
          law firm to review the FoodSource documentation.                            
               Petitioner did not investigate the reasonableness of the               
          container’s purchase price, the practicality of owning a fractional         
          interest in a container, or the viability of the FoodSource                 
               In  1982,  petitioner  purchased  a  one-half  interest5 in            
          FoodSource container No. 506622.  The price for petitioner’s  one-          
          half interest was $130,000.  Petitioner paid $26,000 in cash and            
          gave a nonrecourse note for the balance. Subsequently, he exchanged         
          a recourse note for the nonrecourse note.                                   
               Although petitioner expected the FoodSource container to               
          generate rental income sufficient to pay for the cost of the                

               5    The remaining 50-percent interest was purchased by                
          petitioners’ neighbor, Tom Ream.                                            

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