- 18 -
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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