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EACH PURCHASER OF UNITS HEREIN SHOULD AND IS EXPECTED
TO CONSULT WITH HIS OWN TAX ADVISOR AS TO THE TAX ASPECTS.
In a section entitled “Use of Proceeds”, an estimation of various
expenditures, the memorandum stated that 90.7 to 93.0 percent of
the capital contributions from the partners would be allocated to
the research and development contract (regardless of the total
amount of the contributions). The only other expenses were to be
organizational costs, legal fees, and commissions. One of the
“risk factors” listed for the investment contained the following
discussion:
Federal Income Tax Consequences: An investment in the
units involves material tax risks, some of which are set
forth below. Each prospective investor is urged to consult
his own tax advisor with respect to complex federal (as well
as state and local) income tax consequences of such an
investment.
* * * * * * *
(c) Validity of Tax Deductions and Allocations.
The Partnership will claim all deductions for
federal income tax purposes which it reasonably
believes it is entitled to claim. There can be no
assurance that these deductions may not be contested or
disallowed by the Service * * * . Such areas of
challenge may include * * * expenditures under the R &
D Contract * * * .
* * * * * * *
The Service is presently vigorously auditing
partnerships, scrutinizing in particular certain
claimed tax deductions. * * * Counsel’s opinion is
rendered as of the date hereof based upon the
representations of the General Partner * * * . Counsel
shall not review the Partnership’s tax returns. * * *
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Last modified: May 25, 2011