- 6 - (d) Deductibility of Research or Experimental Expenditures. The General Partner anticipates that a substantial portion of the capital contributions of the Limited Partners to the Partnership will be used for research and experimental expenditures of the type generally covered by Sections 174 and 44F of the Code (particularly in recently issued IRS regulations issued thereunder). However, prospective investors should be aware that there is little published authority dealing with the specific types of expenditures which will qualify as research or experimental expenditures within the meaning of Section 174, and most of the expenditures contemplated by the Partnership have not been the subject of any prior cases or administrative determinations. There are various theories under which such deductions might be disallowed or required to be deferred. * * * No ruling by the Service has been or will be sought regarding deductibility of the proposed expenditures under Section 174 of the Code. 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. * * * The opinion letter referenced in the private placement memorandum was one which purportedly had been written for Mr. Cole by outside counsel based on information provided by Mr. Cole. The letter, dated December 7, 1983, concludes by statingPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Next
Last modified: May 25, 2011