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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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