- 5 -
royalties, licensing fees, and stated interest) and credits on
their joint Federal income tax returns:
Year Losses Claimed Credits Claimed
1979 $119,481 $ -
1980 136,507 132
1981 130,215 208
In Krause v. Commissioner, 99 T.C. 132 (1992), we analyzed
in detail the various EOR technology license and lease agreements
and the purported partnership debt obligations relating thereto
that were entered into by various of the limited partnerships
(specifically including the license and lease agreements
Technology Oil and Gas Associates 1980 (Technology-1980) entered
into with Elektra Energy Corp. (Elektra) and with TexOil
International Corp. (TexOil)), and we analyzed the state of
development of the specific EOR technology involved in the
partnership license agreements.
With regard to the excessive nature of the EOR technology
license and lease agreements, we concluded in Krause that --
The stated consideration agreed to by the partnerships
for the license of EOR technology and for the lease of
tar sands properties bore no relation to the value of
that which was acquired, did not conform to industry
norms, and precluded any realistic opportunity for
profit.
* * * the estimates used by the partnerships for
projected oil recovery from the use and application of
the EOR technology licensed by the partnerships are not
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