- 4 - price of the beans was continuing to increase, and that it was an excellent long-term investment. Petitioner believed that income would come from the production of the jojoba beans and from research and development royalties. Petitioner talked to his certified public accountant Fred Schutz (Mr. Schutz) about the Utah I investment. Petitioner did not know whether he provided Mr. Schutz with a copy of the private placement memorandum. Mr. Schutz reviewed the investment and concluded there was nothing wrong with it from a tax standpoint. Mr. Schutz prepared petitioners' 1982 tax return. Petitioners decided to invest in Utah I. In 1982, they paid $10,000 and gave a promissory note to the partnership. Based on their $10,000 “investment”, petitioners deducted a $20,919 loss on their Federal tax return in the same year. Over time, petitioners completely paid off their promissory note to Utah I. In 1989, when petitioners knew CFS was in bankruptcy, CFS sent out a letter asking for the partners to pay their last payments. Petitioners paid Utah I a total of $23,000. Petitioners lost over $100,000 when Utah I and their other CFS investments went under. On their joint 1982 Federal income tax return, petitioners reported wages from petitioner's medical practice of $129,260 and wages from Mrs. Kessel's job of $30,045. They also deductedPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 Next
Last modified: May 25, 2011