Daniel C. Greer and Winnie L. Greer - Page 5

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          year, petitioner wife was the sole proprietor of a photography              
          A.   G&L Sale and Madison Purchase                                          
              Mr. Greer was the president and chief executive officer of              
         G&L Communications, Inc. (G&L), a family-owned cable television              
         business which operated in Kentucky.  G&L was incorporated in                
         December 1979, and the assets of G&L were sold to a third party in           
         November 1982.  G&L was an S corporation.  Petitioners were                  
         shareholders of G&L at the time the assets were sold and received            
         dividends of approximately $250,000 on the sale.  Prior to their             
         dividends from G&L, petitioners had not held cash assets this                
         large.  This profit led Mr. Greer to seek advice from Hamilton               
         Gregg & Co. (HG), an investment broker and securities dealer with            
         a seat on the New York Stock Exchange.  Mr. Greer had been                   
         introduced to HG through a program at a Holiday Inn in Southport,            
         Ohio, in 1979.  Other AOI executives also attended this program.             
              Mr. Greer’s primary contact at HG was Ed Gallagher, and Mr.             
         Greer met with Mr. Gallagher in late November 1982.  Mr. Gallagher           
         explained the tax consequences of the dividends and suggested                
         purchasing municipal bonds or a limited partnership interest to              
         reduce petitioners’ tax liability for 1982.  Shortly thereafter,             
         Mr. Gallagher delivered a copy of the Offering Memorandum of                 
         Madison Recycling Associates (the offering memorandum) to Mr.                
         Greer.  This offering memorandum and the attachments were the only           

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