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relationship of trust and friendship that existed between the
taxpayers and their C.P.A. Also determinative was the fact that
the taxpayers did not invest as a means of obtaining tax
benefits; rather, their sole motivation was to provide for their
retirement, and they were not even aware that their investment
was in a partnership designed to produce tax benefits. Further,
the taxpayers were not provided with any literature, such as an
offering letter or prospectus, regarding their investment.
In contrast, petitioner is a relatively sophisticated
investor and possessed investment experience at the time that he
invested in Whitman. Moreover, petitioner was also provided with
a copy of the offering memorandum. Furthermore, petitioner was
aware that his investment in Whitman produced immediate tax
benefits in excess of his investment. Indeed, the promise of
such benefits was the principal factor that motivated petitioner
to invest in Whitman.
For the foregoing reasons, petitioners’ reliance on Dyckman
v. Commissioner, supra, is misplaced. Likewise, petitioners’
reliance on Zidanich v. Commissioner, T.C. Memo. 1995-382, is
misplaced for essentially the same reasons.
In addition to the foregoing, we are not convinced that
petitioner regarded his brother as a trusted adviser. First, the
contacts between petitioner and his brother on financial matters
appear to have been casual in nature, and those contacts were
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