- 8 -
individual general partner. As stated, Barton was involved
directly in the Krause case.
All of the 1979 and 1980 partnerships invested in the Monroe
gas field in Texas and leased tar sands acreage in Utah. The
1981 and 1982 partnerships, including Drake and Barton, did not
invest in the Monroe gas field, nor in the tar sands acreage.
All of the 1981 and 1982 partnerships undertook various oil
and gas activities in fields such as the Illinois Basin, Castaic
Hills, and elsewhere, the activities of which were not challenged
by respondent. In spite of such other activities, however, we
still found in Krause v. Commissioner, supra at 150-157, that
Barton's activities were not engaged in with an actual and honest
profit objective and that its EOR technology license fees were
excessive, did not reflect arm's-length obligations, and were not
to be recognized as legitimate debt obligations of Barton. See
id. at 169, 175.
There were 363.1 limited partnership units in Drake sold to
270 limited partners. By 1982, Drake had 275 limited partners.
The total stated subscription price for each limited
partnership unit in Drake was $150,000, payable by each limited
partner as follows:
Cash Promissory Note Due Date
$12,500 --- On subscription
--- $12,500 April 15, 1982
--- 12,500 April 15, 1983
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