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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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