River City Ranches #4 - Page 5

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          RCR #4 and RCR #6 each had been formed as a California limited              
               Before 1981, Mr. Hoyt and his family for a number of years             
          had engaged in promoting and operating a number of cattle                   
          breeding partnerships.  Mr. Hoyt's father was a prominent breeder           
          of Shorthorn cattle, one of the three major breeds of cattle in             
          the United States.  In order to expand his business and attract             
          investors, the father had started organizing and promoting cattle           
          breeding partnerships in the late 1960's.  One of these cattle              
          breeding partnerships previously was the subject of this Court's            
          opinion in Bales v. Commissioner, T.C. Memo. 1989-568.                      
               Around 1978 or 1979, Mr. Hoyt became interested in the                 
          possibility of organizing similar sheep breeding partnerships.              
          As a result, he began discussions with David Barnes (Mr. Barnes),           
          a longtime sheep breeder and childhood friend.                              
               For a number of years, Mr. Barnes and his wife April had               
          owned and operated Barnes Ranches, their sole proprietorship                
          sheep breeding business located in the Sacramento Valley in                 
          California.  They have a son, Randy Barnes (Randy).  After                  
          completing college in 1985, Randy eventually took on a                      
          substantial role in the management and operation of the business.           

               4Although Mr. Hoyt testified that all of the partnerships              
          formed before 1987 had been formed as California limited                    
          partnerships, he later indicated that a few of OGT 90's partners            
          may have been limited partners.                                             

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Last modified: May 25, 2011