River City Ranches #4 - Page 83

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          D.  Some Individual Investors' Failure To Make Payments                     
               During the period from 1981 through 1991, a number of                  
          investors in the eight sheep partnerships (excluding OGT 90) that           
          entered into transactions with Barnes Ranches failed to continue            
          making the specified payments required of them, including paying            
          their pro rata share of the payments required under their                   
          partnership's long-term "Full Recourse Promissory Note".  Mr.               
          Hoyt (who was the general partner managing each partnership)                
          permitted all of these defaulting investors to withdraw from                
          their partnership.  He essentially tried to treat their                     
          withdrawal from a partnership as having no effect upon the                  
          potential tax benefits being claimed by the partnership's                   
          remaining partners.                                                         
               Barnes Ranches and the partnerships never sought to hold any           
          of the defaulting investors personally liable for the payments              
          they had defaulted upon.  These investors were allowed to walk              
          away from their partnership's long-term "Full Recourse Promissory           
          E.  RCR #4's, RCR #6's, and OGT 90's Respective Returns for the             
          Years in Issue                                                              
               RCR #4's returns for some of the years in issue reflect that           
          it originally claimed depreciation and investment tax credit on a           
          "Breeding Flock" placed in service on February 1, 1984, for which           
          its stated cost or other basis was $1,983,486.  RCR #4                      
          depreciated this breeding flock over a 5-year period.                       

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