-4- provided petitioner with a private placement memorandum (which was more than an inch thick) for the partnership, which petitioner read “from cover to cover”. Williams also provided petitioner with two videotapes that were represented to be comparable to those that the partnership would be marketing. Petitioner watched the tapes at his home and recognized the moderator on the tapes as a well-known and respected physician. Petitioner was also familiar with the favorable reputation enjoyed by Hahnemann. A significant portion of the private placement memorandum was dedicated to a discussion of the tax aspects of an investment in the partnership. The private placement memorandum contained a summary of the offering which, in pertinent part, stated: ESTIMATED TAX EFFECT PER $17,000 UNIT: Although Therapeutics CME Group, L.P. (“Partnership”) may have income from its operations, for illustration purposes, the figures below do not take into account any income and assume a 50% tax bracket taxpayer. The Internal Revenue Service (the “IRS” or “Service”) may disallow any of the various elements used in calculating Partnership expenses and credits thereby reducing federal income tax benefits on an investment. 1982 1983 Capital contribution $ 8,500 $ 8,500 Deductible Loss Equivalent 31,903 27,745 Tax Write-off to Cash Investment Ratio 3.8 to 1 3.3 to 1 The private placement memorandum, as well as a tax opinionPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 Next
Last modified: May 25, 2011