- 37 -
issued the opinion. Furthermore, the limited partner opinion
prepared by Boylan & Evans made clear that Boylan & Evans had
not independently investigated the Madison transactions. These
facts should have alerted petitioner that the limited partner
opinion was more like offering material than independent advice
and that it was unreasonable to rely on the limited partner
opinion in claiming Madison-related tax benefits.
An additional reason to reject petitioner’s claim of
reliance is that petitioner did not receive the limited partner
opinion until after he had already invested in the Madison
partnership. Although petitioner had read the general partner
opinion contained in the POM, the opinion clearly stated that no
one but the general partner could rely on it. Petitioner could
not have relied on the limited partner opinion in deciding to
invest in the Madison partnership because he did not see it
until after he had invested.
c. Profit Motive
Petitioner also contends that he acted reasonably in
investing in Madison because he intended to make a profit from
his investment and considered the tax benefits secondary.
Petitioner supports this contention by arguing that he (1)
lacked employment security, (2) had other energy-related
investments, (3) “did not know his tax status” until his return
was complete in May 1983, (4) did not use the investment to
Page: Previous 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 NextLast modified: May 25, 2011