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A section entitled “Tax Aspects” contains the following
information concerning a legal opinion from outside counsel
obtained by the general partner:
The General Partner has received an opinion of counsel
concerning certain of the tax aspects of this investment.
The opinion * * * is available from the General Partner.
Since the tax applications of an investment in the
Partnership vary for each investor, neither the Partnership,
the General Partner, nor counsel assumes any responsibility
for tax consequences of this transaction to an investor.
* * *The respective investors are urged to consult their own
tax advisers with respect to the tax implications of this
investment. * * * Counsel has concluded:
* * * * * * *
(4) * * * The deductions which may be available to
the partnership under Section 174 (Research and
Development) of the Internal Revenue Code are dependent
upon the acceptance by the Internal Revenue Service or
the courts of the Partnership’s characterization of the
transaction as a payment of research and development
fees to the Contractor.
Finally, the investor subscription agreement required a
subscriber upon purchase of an interest to aver that:
He understands that an investment in the Partnership is
speculative and involves a high degree of risk, there is no
assurance as to the tax treatment of items of Partnership
income, gain, loss, deductions of credit and it may not be
possible for him to liquidate his investment in the
Partnership.
Petitioner purchased five units in the partnership for cash
of $5,000 and a promissory note of $9,500. Petitioner made this
investment in 1982 prior to the formation of the partnership on
December 20, 1982. On their 1982 joint Federal income tax
return, petitioners claimed a loss of $13,847 with respect to
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Last modified: May 25, 2011