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Recyclers, reasonable profit, comparables,
capitalization of income, or other factors normally
used in equipment appraisals.
In other words, no rational basis existed for the exorbitant
value assigned to the recyclers in the offering memorandum.
At trial, Thompson testified that “I don’t consider my
letter to be a rousing endorsement of the investment”, an
assertion that can only be described as an understatement when
one considers the conclusion expressed in the letter: “I believe
you may rely upon [the offering memorandum] notwithstanding this
letter, for this letter is no more legally enforceable than the
Memorandum.” (Emphasis added.) We regard this conclusion as
tantamount to a total disclaimer, a view that is supported by
Thompson’s testimony at trial:
Q: Is there any reservation that you have on this
* * * [conclusion] of the letter?
A: Do I have a reservation? You mean would I
take anything back of what I said?
Q: Sure.
A: No, I don’t think I gave very much away.
There’s nothing to take back.
Petitioner’s contention that he regarded Thompson’s letter
as positive justification for claiming the tax credits and loss
deductions is, of course, self-serving. See Tokarski v.
Commissioner, 87 T.C. at 77; Niedringhaus v. Commissioner, 99
T.C. at 219-220. To accept petitioner’s contention would require
us to ignore the clear tenor of the letter and take several
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