- 52 - offering memoranda in these cases, especially the discussions of high writeoffs and risk of audit, should have alerted a prudent and reasonable investor to the questionable nature of the promised deductions and credits. See Collins v. Commissioner, 857 F.2d 1383, 1386 (9th Cir. 1988), affg. Dister v. Commissioner, T.C. Memo. 1987-217; Sacks v. Commissioner, T.C. Memo. 1994-217. In each case, the projected tax benefits in the respective offering memoranda exceeded petitioners' respective investments. According to the offering memoranda, for each $50,000 investor, the projected first-year tax benefits were investment tax credits in excess of $82,500 plus deductions in excess of $39,000. Specifically, the projected investment tax credits and deductions for the Partnerships in the first year of the investment for each $50,000 investor were as follows: $82,639 and $39,323 for Scarborough in 1981; $84,813 and $40,671 for Phoenix in 1981; $82,639 and $40,037 for SAB Recycling in 1982; and $83,712 and $40,234 for SAB Reclamation in 1982. For Mrs. Zenkel's gross $50,000 investment, the Zenkel's claimed an operating loss in the amount of $40,100 and investment tax and business energy credits in the amount of $83,712. As a result of his gross $25,000 investment, Blount claimed a $20,520 operating loss and $42,402 in investment tax and business energy credits. For their gross $25,000 investment, the Davids claimedPage: Previous 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 Next
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