G. Dastgir and Mary A. Qureshi - Page 5

          container as well as yield a profit, he understood that if the              
          monthly earnings from the container rental were insufficient to             
          meet monthly expenses, he would be required to pay the difference.          
          Petitioner never saw or possessed the container.                            
               Petitioner received periodic statements from FoodSource with           
          respect to his interest in the container that purported to show             
          rental revenues generated and expenses incurred. He eventually              
          discovered that the revenue information contained in these                  
          statements was false.                                                       
               Petitioner made three payments in 1984 to FoodSource totalling         
          $2,655.95 for 1984.  The purpose of these payments is unknown.              
               In 1990, petitioner was notified that the Budd Co. had                 
          possession of his container,6  and that the Budd Co. was planning           
          to sell it.  The Budd Co. offered to sell the container to                  
          petitioner and Mr. Tom Ream (the other 50-percent interest holder)          
          for $22,000. Neither petitioner nor Mr. Ream chose to accept this           
          offer.  Eventually, the container was sold at auction.                      
               FoodSource filed for bankruptcy in 1984. In 1990, petitioner           
          paid $25,000 on his recourse note to FoodSource’s trustee in                
          Closing Agreement                                                           
               On their tax returns for 1979, 1980, 1982, and 1983,                   
          petitioners claimed credits, deductions, and losses with respect to         

               6    The record is devoid of any evidence as to why the Budd           
          Co. possessed the container at that time.                                   

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