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FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
The stipulation of facts, the supplemental stipulation of facts,
the stipulation of settled issues, and the attached exhibits are
incorporated herein by this reference. Petitioner resided in
Boulder, Colorado, at the time he filed his petition.
In 1980, petitioner invested in Sav-Fuel Associates (Sav-
Fuel), a Connecticut limited partnership.3 During the years in
issue, petitioner, as a limited partner, had a 2.152174-percent
interest in the profits and losses of Sav-Fuel. The sole general
partner of Sav-Fuel was Winston Frost (Mr. Frost), who held a 1-
percent interest in the profits and losses of the partnership. A
private placement memorandum (PPM) for Sav-Fuel was distributed
to potential investors.
The stated purpose of Sav-Fuel was to acquire an energy
management system (EMS) to be installed in the manufacturing
plant of Gould, Inc. (Gould), located in El Monte, California.
The EMS was to include master controllers, control modules, heat
exchangers, fans, valve controls, an automated lighting control
system, and other devices and controls. The stated function of
the EMS was to provide a technologically advanced yet simple and
3The evidence in the record indicates that Sav-Fuel was
formed on July 1, 1980.
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