- 15 -
Petitioner characterized himself as a person of modest means
at the time of his involvement in the transaction. He earned
about $28,000 annually from teaching, and his net worth was less
than $100,000. Although petitioner attended several meetings
prior to investing, after the investment and receipt, in cash, of
the tax benefits, he did nothing to determine the status of his
investment. Petitioner did not personally observe the energy
device, of which he thought his share of the cost approximated
$70,000.3 Additionally, he did not ascertain whether any energy
device had actually been leased. In this regard, it was
petitioner's understanding that lease payments would be made from
the lessee's energy savings.
As a matter of perspective, we find it difficult to believe
that petitioner was expecting the energy device or his
partnership investment to provide an income stream or residual
value for retirement or any other purpose. A reasonable person
with a $100,000 net worth and $28,000 salary, who was buying a
16-percent interest in an energy device allegedly worth almost $1
million, could be expected to have more than a detached interest
in seeing the device and/or verifying its value or the eventual
outcome of its proposed energy savings. This is especially so
3 Although he testified to a value for his interest of about
$70,000, petitioner's claim for a refund reflects that he was
claiming an investment credit based on $165,003 value, which
represents his 16.667-percent interest in Evergreen and the
energy device. Accordingly, the energy device had a purported
cost of $990,000.
Page: Previous 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 NextLast modified: May 25, 2011