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statement that the investor had been advised to consult with an
attorney concerning the tax consequences of the investment.
Petitioner purchased two interests in Yuma Mesa in December
1982. At the time she purchased the interests, she knew of the
sizeable tax benefits that the promoters projected the partners
would receive for taxable year 1982. Petitioner was issued a
Schedule K-1 by the partnership which reflected a $23,174
ordinary loss for taxable year 1982. At this time, petitioner
had just recently contributed only $7,142 in cash to the
partnership.3
As a limited partner, petitioner did not participate in the
activities of the partnership. She did not hear of Yuma Mesa
until several years later, when she was contacted by other
limited partners who were concerned that they were being treated
unfairly by the general partners and that their investments might
have been diverted into another partnership.
On petitioner’s Federal income tax return for taxable year
1982, she reported $121,000 in compensation from her professional
association, and $2,421.61 in other income. From this she
subtracted a $23,254.99 loss as reported on Schedule E. On the
3Petitioner testified that she was uncertain of the amount
of cash she contributed in 1982. Because nothing else in the
record indicates petitioner’s investment varied from that which
was stated in the private placement memorandum, we accept this
document’s stated terms as accurately reflecting petitioner’s
investment.
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