Shorthorn Genetic Engineering 1982-2, Ltd., Shorthorn Genetic Engineering 1982-4, Ltd., Shorthorn Genetic Engineering 1982-5, Ltd., Walter J. Hoyt III, Tax Matters Partner, et al. - Page 17

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          that a limited partner may be expelled for defaulting on                    
          partnership obligations, much less that an expulsion would be               
          retroactive to the beginning of the partnership.                            
               Moreover, the settlement agreement expressly provides for              
          the inclusion of partners who default on their note obligations             
          to Ranches (inactive partners) in the original allocations of the           
          partnership debt.  The agreement is binding on the parties.  Sec.           
          6224.                                                                       
               Petitioner also makes the following secondary arguments:               
          (1) Various partners, by their actions or inactions, failed to              
          abide by the provisions of the amended partnership agreement;               
          therefore their interests have been terminated; (2) a large                 
          number of partners defaulted on the notes to Ranches in 1987, and           
          their cattle have been repossessed; therefore these partners                
          should not be allocated any partnership debt; and (3) certain               
          partners terminated their interests in 1994 by letters alleging             
          that the partnerships were terminated shortly after inception.              
               Respondent objected to any evidence of these purported                 
          actions or inactions as irrelevant because they were subsequent             
          to the taxable years at issue.                                              
               Evidence is relevant if it tends to make the existence of              
          any fact that is of consequence to the determination of the                 
          action more probable or less probable than it would be without              
          the evidence.  Fed. R. Evid. 401.  Petitioner proffered evidence            





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