Robert S. Cohen and Margery Cohen - Page 16

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          the partnership tax return; and (3) increased SAB Foam’s “other             
          income” by $5,626.                                                          
               Subsequently, SAB Foam’s TMP filed a petition with the                 
          Court.  On September 7, 1993, the Court entered a decision in SAB           
          Foam Recycling Associates 1982 v. Commissioner, docket No. 5103-            
          92.  This decision reflected a full concession by SAB Foam of all           
          items of income (loss) and credit previously claimed for the                
          partnership.                                                                
          E.  Petitioners’ Introduction to Plastics Recycling                         
               In 1981 and 1982, petitioner, Lewin, and Feinberg were                 
          partners in LFC.  In 1981 Becker offered petitioner a limited               
          partnership share in SAB Resource Recycling Associates (SAB                 
          Resource), a limited partnership structured substantially like              
          SAB Foam.  After discussing the investment with Lewin and                   
          Feinberg, petitioners decided to purchase a quarter unit in SAB             
          Resource for $12,500.  Petitioners had no experience with the               
          plastics materials or the plastics recycling industry.                      
               On January 14, 1982, petitioner received a letter from SAB             
          Management, as general partner of SAB Resource, signed by Becker,           
          stating that the transaction contemplated by SAB Resource was               
          complete and distributing a modest initial royalty.  On June 7,             
          1982, SAB Management sent a memo to the limited partners,                   
          including petitioners, purporting to update the status of their             
          investment in SAB Resource.                                                 






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