Douglas A. and Janet Vander Heide - Page 11

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          for which he paid a total of $40,000 in cash.  The amount of                
          recourse debt which petitioner assumed totaled $114,805.                    
               Prior to investing in the partnership, petitioner had never            
          invested in an equipment leasing transaction.  Petitioner spoke             
          to his accountant, Joseph R. Levin, three times about his                   
          investment in the partnership.  Petitioner never spoke to Barry             
          Goldwater, Jr., the general partner of the partnership, Herman              
          Finesod, the chairman of the board of Hambrose Reserve, or James            
          Harber or Ron Finerty, the other officers of Hambrose Reserve,              
          about this investment.  Petitioner received the subscription                
          documents on November 21, 1985, the day he signed them.                     
               Petitioner understood that the rents from Charterhouse would           
          be used to offset debt payments to Hambrose.  He was not                    
          concerned about the end-users because they were big companies.              
          Petitioner understood that the partnership's promissory note on             
          which he assumed personal liability would be paid in 1992.  The             
          partnership never asked petitioner for additional contributions.            
               Petitioner knew that the investment would create tax losses,           
          and he had seen a schedule of projected tax losses for each                 
          taxable year.  Petitioner expected the investment to yield                  
          phantom income in the third or fourth year.  Petitioner knew that           
          phantom income is not an actual cash distribution.                          
                                       OPINION                                        
          At-Risk                                                                     
               We must now decide whether petitioners were at risk for                
          their assumed liability in the context of the sale-leaseback                


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