EXHIBIT 8
(000) 000-0000
(000) 000-0000
November 16, 1998
Portfolio Xxxxx, L.L.C.
Portfolio Boost III, L.P.
Attention: Xx. Xxxxxxx X. Xxxx
Cornerstone at Cantera
0000 Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxx 00000
RE: Portfolio Boost III, L.P., an Iowa Limited Partnership
Dear Xx. Xxxx:
On behalf of Portfolio Xxxxx XXX, L.P. (the "Partnership"), a limited
partnership formed under the Uniform Limited Partnership Act of the State of
Iowa (the "Iowa Act"), you have requested our opinion regarding certain tax
matters related to the Partnership.
We have reviewed the preliminary Prospectus, including the Limited
Partnership Agreement of the Partnership (the "Partnership Agreement") and the
other Exhibits referred to therein (collectively, the "Prospectus"), included in
the Registration Statement on Form SB-2 filed with Securities and Exchange
Commission on or around the date hereof. We have reviewed relevant provisions of
the Iowa law and relevant provisions of the Internal Revenue Code of 1986, as
amended ("Code"). We have also reviewed Treasury Regulations issued under the
Code ("Regulations") and various published interpretations of the Code and
Regulations. Capitalized terms used herein and not otherwise defined herein
shall have the meanings ascribed to them in the Partnership Agreement.
Xxxxxxx X. Xxxx
November 16, 1998
Page 2
We are relying upon the facts stated in the Prospectus which you have
represented to us to be accurate and complete in all material respects. We are
not aware of any reason to believe that such facts and analyses are not accurate
in all material respects.
We are also relying upon your representations that (a) at all times the
Partnership will be operated in accordance with the Iowa Act, as applicable, and
the Partnership Agreement, (b) the aggregate deductions to be claimed by the
Partners as their distributive share of the Partnership net losses for the first
two years of operation of the Partnership will not exceed the amount of equity
capital invested in the Partnership, (c) no creditor who makes a loan to the
Partnership will have or acquire as a result of making the loan any direct or
indirect interest in the capital, profits or property of the Partnership other
than as a secured creditor, (d) interests in the Partnership will not be (1)
traded on an established securities market, or (2) readily tradable on a
secondary market (or the substantial equivalent thereof) and (e) the Partnership
will not elect to be taxed as a corporation.
You have requested our opinion concerning the Federal income tax analysis
presented in the Prospectus.
Our analysis is based upon the facts described in the Prospectus which
reflect the facts as you have represented them to us as of this date. We assume
the facts as related to us therein accurately and completely describe all
material activities affecting the Partnership which you can reasonably foresee.
Based on our review and your representations described heretofore,
including the facts as set forth in the Prospectus, and subject to the
limitations which follow, (i) we are not aware of any material Federal income
tax consequences from participating in the Partnership which have been omitted
from the Prospectus, (ii) we are not aware of any Federal income tax
consequences set forth in the Prospectus which have been materially misstated,
and (iii) we believe that more likely than not in the aggregate the material tax
benefits associated with an investment in the Partnership will be realized.
The material tax benefits which we believe will exist as described in the
Prospectus may be divided into the following major categories: (1) the right of
the Partners to claim tax treatment accorded partners by the Code, including
classification of the Partnership as a partnership for Federal income tax
purposes and not as an association taxable as a corporation; (2) the allocation
of Partnership profits and losses in accordance with the terms of the
Partnership Agreement; (3) the cost of a Partner's Units as constituting the
Partner's beginning basis in those Units; (4) the deduction or amortization of
certain start-up and organizational expenditures; (5) the treatment of commodity
transactions of the Partnership as Section 1256 contracts or other commodity
transactions as the case may be; and (6) the presence of a profit motive for the
venture.
Xxxxxxx X. Xxxx
November 16, 1998
Page 3
We cannot render an opinion as to whether certain tax aspects of the
venture will affect the realization of the aggregate tax benefits, because the
factual nature of certain determinations make it impossible to render an opinion
as to the allocation of certain business expenditures between deductible
business expenses, expenditures which are capitalized and amortized as start-up
expenditures, expenditures which are capitalized and amortized as organizational
expenditures, and syndication expenses which are neither deductible nor
amortizable.
Our opinion is based upon current law and published Internal Revenue
Rulings, Internal Revenue Procedures, Regulations and court decisions
(collectively, the "Published Interpretations") all of which are subject to
change prospectively or retroactively. The opinions herein express our best
judgment of the law and Published Interpretations, but our opinion is not
binding upon the Internal Revenue Service or the courts, either of which may
reach different conclusions than ours. We believe we have reasonably relied upon
the facts as represented by you. However, generally, the facts which you have
represented relate to future activities which you have predicted but which you
cannot assure. Any change in the facts, whether past or prospective, may
adversely affect our opinion. Further, we express no opinion as to whether the
Internal Revenue Service may successfully challenge factual determinations which
are made by you such as, without limitation, allocation of costs and expenses.
You have not analyzed the state and local income tax consequences related
to participation in the Partnership and have so stated in the "Federal Income
Tax Aspects" section of the Prospectus. Consequently, you have not requested our
analysis or opinion of any aspect of the state and local tax consequences which
may flow from participation in the Partnership, and no opinion with respect
thereto is expressed by us.
In connection with our rendering of the above opinions, please be advised
that we have examined only the documents indicated.
We are members of the Bar of the State of Iowa and do not hold ourselves
out as experts on the laws of any other state or foreign country. Consequently,
we express no opinion with respect to the laws of any jurisdiction other than
the State of Iowa.
We hereby consent (i) to being named in the "Federal Income Tax Aspects"
section of the Prospectus as the attorneys who will render certain opinions for
the Partnership related to certain federal income tax aspects related to the
Partnership and an investment in the Partnership, and (ii) to the inclusion of
this opinion as Exhibit 8 to the Registration Statement on Form SB-2 to be filed
with the Securities and Exchange Commission along with the Prospectus, and as
exhibits to the Registration Statements to be filed with the applicable
securities authorities of the states listed on Schedule I attached to this
letter.
Xxxxxxx X. Xxxx
November 16, 1998
Page 4
This letter is limited to the matters stated herein and no opinion is
implied or may be inferred beyond the matters expressly stated herein. Without
limiting the generality of the foregoing, we express no opinion on the accuracy
or completeness of any tables, charts, graphs, or financial statements included
in the Prospectus.
Very truly yours,
NYEMASTER, XXXXX, XXXXXX, XXXX,
XXXXXXX & X'XXXXX, P.C.
By:/s/Xxxxxx X. Xxx
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Xxxxxx X. Xxx
SJR/cda
SCHEDULE I
California
Colorado
Connecticut
Delaware
Florida
Illinois
Indiana
New Jersey
North Carolina
Pennsylvania
Xxxxxxxx
Xxxxxxxxxx
Wisconsin
