Wayne and Pamela Berry - Page 3




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          incorporated herein by this reference.  Petitioners resided in              
          Lake Stevens, Washington, at the time the petition was filed.               
          A.  The Whitman Transactions                                                
               These cases are part of the Plastics Recycling group of                
          cases.  The additions to tax arise from the disallowance of                 
          losses, investment credits, and energy credits claimed by                   
          petitioners with respect to a partnership known as Whitman                  
          Recycling Associates (Whitman).                                             
               For a detailed discussion of the transactions involved in              
          the Plastics Recycling group of cases, see Provizer v.                      
          Commissioner, T.C. Memo. 1992-177, affd. per curiam without                 
          published opinion 996 F.2d 1216 (6th Cir. 1993).  The parties               
          have stipulated that the underlying transactions involving the              
          Sentinel recycling machines (recyclers) in this case are                    
          substantially identical to the transactions in Provizer v.                  
          Commissioner, supra.                                                        
               Whitman, a limited partnership, was organized on September             
          22, 1982.  It purported to lease four recyclers manufactured by             
          Packaging Industries (PI) of Hyannis, Massachusetts.  On its 1982           
          Federal income tax return, Whitman reported that each recycler              
          had a basis of $1,750,000, and the partnership reported a net               
          ordinary loss of $713,975.90.  The losses and credits reported by           
          Whitman were passed through to petitioners and the other limited            
          partners.                                                                   






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