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The purported value of the recyclers generated the
deductions and credits in this case, and that circumstance was
clearly reflected in the memorandum. Certainly Becker recognized
the nature of the tax benefits and, given his education and
experience, petitioner should have recognized it as well. Yet
neither petitioner nor Becker verified the purported value of the
recyclers. Becker confirmed in his testimony incorporated in
this record by stipulation that he relied on PI for the value of
the recyclers. An investor as sophisticated as petitioner either
learned or should have learned the source and shortcomings of
Becker’s valuation information when Becker reported to him and
“precisely” disclosed “what [he] had done to investigate or
11(...continued)
there, that there were orders for machines there, that
the machines were producing product of the type that
were described in the expert opinions as to what the
machines were supposed to generate, or at least
appeared to do that, and to see if there was some
reasonable relationship to justify the price of the
machine. [Emphasis added.].
According to petitioner, Becker confirmed that he had performed
the suggested tasks. With regard to SAB Foam, petitioner
testified that he discussed the valuation with Becker on the same
basis as with the previous transaction (i.e., SAB Resource).
We consider petitioner’s testimony inconsistent with
Becker’s testimony, and as to this matter we consider Becker’s
testimony reliable and petitioner’s alleged recollection
unreliable. See supra note 10 to the effect that this problem
was known to petitioner and his counsel, who chose not to call
upon Becker for clarifying testimony.
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