- 17 - Sometime during 1978, Woolf met Schluter. Thereafter Schluter prepared Woolf’s and Ditch Witch’s tax returns. In addition, Schluter provided tax and business advice to Woolf. In 1982, Schluter told Woolf about Hamilton. As a result, Woolf received and briefly reviewed the Hamilton offering memorandum, but he did not read the entire offering memorandum. Before he invested in Hamilton, Woolf was informed that Schluter had reservations as to the value of the recyclers. Nevertheless, Woolf did not take any further steps to determine whether the recyclers were accurately valued. Woolf has no education or work experience in the plastics recycling or plastics industries. In 1982, Woolf paid $25,000 for his partnership interest in Hamilton. Woolf contends that he invested in Hamilton because of Schluter’s advice. Woolf also contends that he participated in Hamilton because he believed recycling was good for the environment. Schluter told Woolf that Hamilton was a tax shelter. Woolf understood the meaning of the term “tax shelter” and knew that Hamilton was a tax shelter. As a result of his partnership interest in Hamilton, on his 1982 Federal income tax return Woolf claimed a net operating loss deduction of $19,578 and investment tax and business energy credits totaling $38,500, which was limited to his 1982 income tax liability (as reduced by the partnership loss) of $18,266.Page: Previous 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Next
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