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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
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