- 5 - (recyclers) to Ethynol Cogeneration, Inc. (ECI), for $1,520,000 each. ECI paid for the recyclers with $481,000 cash and a 12- year nonrecourse promissory note in the amount of $5,599,000, which was secured by a lien on the four recyclers. ECI simultaneously resold the four recyclers to F&G Equipment Corp. (F&G) for $1,750,000 each. F&G paid for the recyclers with $553,000 cash and a 12-year promissory note in the amount of $6,447,000, 80 percent of which was nonrecourse. The nonrecourse portion of the note was senior to the recourse portion, and the note was secured by a second lien on the four recyclers. F&G simultaneously leased the four recyclers to Madison, and Madison simultaneously entered into a joint venture agreement with PI and Resin Recyclers, Inc. (RRI), to place the recyclers with end users. Under the joint venture agreement, which was to last 9-1/2 years, Madison received a fixed, monthly joint venture fee equal to the monthly lease payment made to F&G. The fixed monthly joint venture fee also equaled the payments both F&G and ECI were obligated to make under their respective promissory 9(...continued) substantially identical. We shall refer to both Sentinel EPS and Sentinel EPE Recyclers as “recyclers”. See Cohen v. Commissioner, T.C. Memo. 2003-303; Barlow v. Commissioner, T.C. Memo. 2000-339, affd. 301 F.3d 714 (6th Cir. 2002); Davenport Recycling Associates v. Commissioner, T.C. Memo. 1998-347, affd. 220 F.3d 1255 (11th Cir. 2000); see also Gottsegen v. Commissioner, T.C. Memo. 1997-314 (involving both EPE and EPS recyclers).Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011