Robert D. and Patricia K. Kaliban, et al. - Page 25

                                               - 25 -                                                 
            Reclamation on their 1982 return in the amount of $409.                                   
            Respondent disallowed the Zimmers' claimed operating losses and                           
            credits related to Poly Reclamation in full.                                              
                  Zimmer learned of the Plastics Recycling transactions and                           
            Poly Reclamation at a meeting with Alter and Feinstein.  Alter                            
            and Feinstein explained the transactions to him.  Zimmer recalled                         
            that Alter and/or Feinstein had investigated the Plastics                                 
            Recycling transactions and PI, and had inspected the recyclers.                           
            He understood that the investment would generate additional tax                           
            credits because it purportedly saved energy.  However, Zimmer                             
            could not recall learning about the relationship between the                              
            price of oil and the value of the recycled pellets.  He was                               
            encouraged that Alter and other members of Shea & Gould were                              
            investing in a Plastics Recycling transaction.                                            
                  Zimmer never read the Poly Reclamation offering memorandum                          
            and never asked to see it.  He claims that he expected to receive                         
            royalty payments, but he did not independently investigate                                
            whether the recycled pellets had any value.  When asked if he was                         
            aware that the first-year tax benefits would exceed the amount of                         
            his investment, Zimmer stated:  "I don't know that I was aware of                         
            that.  Yes, I am now.  I knew it had a certain advantage.  The                            
            monetary, I honestly--it never made any impression upon me.  No                           
            one--if it was explained to me, it went by me, it went over my                            
            head."  Zimmer decided to invest in Poly Reclamation based on his                         
            meeting with Alter and Feinstein.  He recalled receiving progress                         




Page:  Previous  15  16  17  18  19  20  21  22  23  24  25  26  27  28  29  30  31  32  33  34  Next

Last modified: May 25, 2011