8
91 T.C. 14, 20-21 (1988). For collateral estoppel to apply, an
issue litigated and decided in the previous action must be
identical with the issue presently before the Court. Montana v.
United States, 440 U.S. 147, 153 (1979); Peck v. Commissioner, 90
T.C. 162, 166-167, affd. 904 F.2d 525 (9th Cir. 1990).
Petitioners have not established that the issue presented herein
is identical to one of the issues presented in Bales v.
Commissioner, supra.
The taxpayers in Bales v. Commissioner, supra, were partners
in several limited partnerships which were organized by Walter J.
Hoyt III to engage in the business of breeding cattle. The
issues presented in that case included whether purchases of
breeding cattle by those partnerships were bona fide
transactions, and, if so, whether such purchases were eligible
for the investment tax credit. The Court held: "Cattle are
section 38 property and therefore eligible for the credit. Sec.
48(a)(6)." However, the transactions involving Washoe Ranches #7
LTD. were not before the Court in Bales v. Commissioner, supra.
There is no dispute that cattle are section 38 property, and that
purchases of cattle may be eligible for the investment tax
credit. The issue in this case is whether cattle were acquired
and placed in service by Washoe Ranches #7 LTD. in 1978. This
issue is not identical to an issue litigated and decided in Bales
v. Commissioner, supra. Nor has it been shown that petitioners
are in privity with the taxpayers in Bales. Thus, respondent is
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