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According to their 1982 Federal income tax return,
petitioners invested $12,500 and acquired a 1.455882-percent
limited partnership interest in SAB Foam’s profits, losses, and
capital. On their 1982 tax return, petitioners claimed an
ordinary loss of $9,646 from SAB Foam and an investment and
energy tax credit of $20,385.7
OPINION
We have decided many Plastics Recycling cases. Most of
these cases, like the present case, have presented issues
regarding additions to tax for negligence. See, e.g., Weitzman
v. Commissioner, T.C. Memo. 2001-215; Thornsjo v. Commissioner,
T.C. Memo. 2001-129; West v. Commissioner, T.C. Memo. 2000-389;
7 The parties have stipulated that petitioners’ 1982
distributable share of SAB Foam’s loss was $9,646, that he
claimed as unadjusted basis of new recovery property eligible for
investment credit $101,912 resulting in a credit of $20,385, and
that petitioners reported these amounts on their 1982 Federal
income tax return. These numbers are consistent with a quarter
unit investment of $12,500, which petitioner testified to, and a
1.455882-percent limited partnership interest.
The parties also stipulate the accuracy of the SAB Foam 1982
income tax return and the Form 1065 Schedules K-1, Partner’s
Share of Income, Credits, Deductions, etc., attached to that
return. According to the Schedule K-1 that SAB Foam prepared for
petitioners, petitioners invested $25,000, a half unit
investment, and received a 2.911764-percent limited partnership
interest in SAB Foam. This schedule shows a distributable share
of SAB Foam loss of $19,292 and unadjusted basis of new recovery
property of $203,823. The stipulations are inconsistent, and
petitioners’ 1982 Federal income tax return is inconsistent with
his 1982 Schedule K-1 issued by SAB Foam.
The amounts of penalty in issue have not been disputed by
the parties, although liability for penalties is in dispute.
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