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* * * * * * *
The amount of liabilities assumed personally by the partners
during the first year of the partnership will be based on
original subscription agreements, and will be provided by
Walter J. Hoyt within one week after the partnership
spreadsheet is submitted to him for review and/or
correction.
* * * * * * *
All partners who originally assumed personal liability for a
portion of the partnership debt during the first year of the
partnership -- whether they are now determined to be active
or inactive partners -- will be assigned a share of the
lower amount of recognized partnership debt described above.
Each partner's share will be the exact same percentage as
his/her share of the partnership debt originally assumed.
The agreement defines active partners as those who continue
to honor their obligations to Ranches and continue to participate
in the partnership and inactive partners as those who have walked
away from their note obligations and/or no longer participate in
the partnership.
As an alternative, respondent made a settlement offer to the
partners on an individual basis. The terms of the offer provided
generally that a partner who accepted would be allowed a
deduction for any cash paid to the "Hoyt Organization" in the
year of payment. The partner would not be allowed any other
deductions or credits nor be required to recognize any income
related to the partnerships. The record does not indicate how
many partners accepted this settlement offer (referred to as the
out-of-pocket settlement).
Respondent's spreadsheets calculating the partners'
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Last modified: May 25, 2011