Robert D. and Patricia K. Kaliban, et al. - Page 18

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            bills.  They also prepared Kaliban's tax returns and reviewed                             
            investment opportunities that had been suggested to him by                                
            others.  Prior to 1981, Kaliban invested in two successful real                           
            estate ventures in which Alter also participated.  On their joint                         
            1981 Federal Income tax return, Robert and Patricia Kaliban                               
            reported gross income from wages, interest, dividends, State and                          
            local tax refunds, and capital gains in excess of $282,000.                               
                  Kaliban acquired a 1.547-percent interest in Poly                                   
            Reclamation for $12,500 in 1981.  As a result of the investment                           
            in Poly Reclamation, on their 1981 Federal income tax return                              
            Kaliban and his wife Patricia claimed an operating loss in the                            
            amount of $9,976 and an investment tax and business energy credit                         
            in the amount of $21,584.8  The Kalibans also claimed an                                  
            operating loss from Poly Reclamation on their 1982 return in the                          
            amount of $409.  Respondent disallowed the Kalibans' claimed                              
            operating losses and credits related to Poly Reclamation in full.                         
                  Kaliban learned of the Plastics Recycling transactions and                          
            Poly Reclamation from Alter and Feinstein.  He understood that                            
            members of Shea & Gould had looked into PI and that some of them,                         
            including Alter, were investing in the Plastics Recycling                                 
            transactions.  Alter did not hold himself out as a plastics                               
            expert, but Kaliban claims that he understood that Alter had                              
            spoken to a member of Shea & Gould who apparently had been                                

            8     On their 1981 return, the Kalibans claimed a total of                               
            $21,797 in credits.                                                                       

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