Carl L. and Eugenia T. Henn - Page 6




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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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