David C. Jonson and Estate of Barbara J. Jonson, Deceased - Page 11

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          middle class lifestyle and the education of 3 children and                  
          service of credit card and other debt.”  Among the attachments to           
          the Form 8857 is a questionnaire answered by Barbara before her             
          death and containing the following question and answer pertaining           
          to her knowledge of the circumstances surrounding David’s                   
          investment in Vulcan:                                                       
               Q.   Explain what you knew about the investment and how                
               you learned about the investment.                                      
               A.   This investment was recommended by a banker friend                
                    of my husband.  My husband explained that the                     
                    investment was entirely legal and proper,                         
                    according to the lawyers and accountants                          
                    associated with this tax shelter.  Even the                       
                    Attorney General for the U.S. at the time, William                
                    French Smith, thought it was proper (see attached                 
                    news clipping).  At the time, IRS tax rates for                   
                    the upper brackets were very high and we had three                
                    kids in college.  We were desperate for some tax                  
                    relief to make ends meet.  I took my husband’s                    
                    word that it was OK.                                              
               The referenced news article, from the May 13, 1982, edition            
          of the Rocky Mountain News, reported that Attorney General Smith            
          considered some $66,000 in deductions attributable to a $16,500             
          “investment in a risky energy tax shelter” to be “proper”, but it           
          quoted a Justice Department spokesman as stating that Mr. Smith             
          “will look into it to reassure himself”.  The article cited a               
          Washington Post report quoting “experts” as describing the                  
          venture “as ‘one of the most aggressive and perhaps questionable            
          tax shelters available to wealthy Americans’”.  The report was              

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