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We have consented to your inclusion of the proposed
form of this letter in the Memorandum, but this letter
is intended for your own individual guidance and for
the purpose of assisting prospective purchasers and
their tax advisors in making their own analysis, and no
prospective purchaser is entitled to rely upon this
letter.
The tax opinion expressly warned that the investment and energy
tax credits available to limited partners would be reduced or
eliminated if the partnership could not demonstrate that the
price paid for the recyclers approximated their fair market
value. The tax opinion did not purport to rely on any
independent confirmation of the fair market value of the
recyclers. Instead, the tax opinion clearly relied on Ulanoff’s
conclusion that the purchase price to be paid by F&G was fair and
reasonable. The tax opinion also states: “PI, ECI, F&G, and the
Partnership have represented to us that the prices paid by ECI
and by F&G and the terms of the Lease were negotiated at arm’s
length.” The tax opinion concludes that the basis to the
partnership upon which the aggregate investment and energy tax
credits are to be computed is the price paid by F&G for the
recyclers.
C. Individuals Involved
Petitioner received his B.A. degree from Alford University
and his J.D. degree from Fordham University. After graduating
from law school in 1962, petitioner enlisted in the military and
was released from active duty as a first lieutenant. He then
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