Robert D. and Patricia K. Kaliban, et al. - Page 29

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            in connection with the transactions were reasonable in light of                           
            his experience and the nature of the investment or business.  See                         
            Henry Schwartz Corp. v. Commissioner, 60 T.C. 728, 740 (1973).                            
            When considering the negligence addition to tax, we evaluate the                          
            particular facts of each case, judging the relative                                       
            sophistication of the taxpayers, as well as the manner in which                           
            they approached their investment.  McPike v. Commissioner, T.C.                           
            Memo. 1996-46.  Compare Spears v. Commissioner, T.C. Memo. 1996-                          
            341 with Zidanich v. Commissioner, T.C. Memo. 1995-382.                                   
                  Petitioners maintain that they were reasonable in claiming                          
            deductions and credits with respect to the Partnerships.  They                            
            argue that they expected an economic profit in light of the so-                           
            called oil crisis in the United States in 1981 and that they                              
            reasonably relied upon Alter and Feinstein as qualified advisers                          
            on this matter.                                                                           
                  1.  The So-Called Oil Crisis                                                        
                  Petitioners in their posttrial briefs each contend that they                        
            reasonably expected to make an economic profit from the                                   
            Partnerships because plastic is an oil derivative and the United                          
            States was experiencing a so-called oil crisis during the year                            
            1981.  Based upon our review of the records, we find petitioners'                         
            claims unconvincing, regardless of the so-called oil crisis.                              
            Moreover, testimony by one of respondent's experts establishes                            
            that the oil pricing changes during the late 1970's and early                             
            1980's did not justify petitioners' claiming excessive investment                         

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