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requirements, and his familiarity with the reputation of Hahnemann,
which was to produce the programs. As for other aspects of the
investment, petitioner contends that it was reasonable for him to
rely on the recommendation of Freasier, petitioner's "long-standing
and trusted tax attorney".
We do not believe petitioner's medical expertise gave him the
“expertise and intelligence” to decide whether his investment in
the partnership made economic sense. Indeed, in Charlton v.
Commissioner, supra, we held that the partnerships were sham
transactions in which tax considerations were paramount.
Petitioner's knowledge of sports medicine, Hahnemann's reputation,
and the continuing medical education needs of physicians provided
at most a superficial basis for evaluating this purported
investment opportunity.
We believe that a reasonable investor would have done more
than petitioner did in determining whether an investment in the
partnership made economic sense. In our opinion, petitioner’s
decision to become a partner in the partnership was tax driven, not
economically driven.
The record is devoid of any evidence that Freasier had
knowledge about the nontax aspects of the partnership beyond that
contained in the promotional material. (Freasier did not testify.)
Further, the record is devoid of the type of advice (tax vs.
investment) petitioner received from Freasier. In this regard,
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