- 72 -
H. Conclusions34
Both the RCR #4 and RCR #6 bills of sale listed large
numbers of breeding sheep which did not actually exist. In
addition, the RCR #4 bill of sale was not a contemporaneous
document. Each partnership's stated purchase price for its
breeding sheep further did not reasonably approximate the sheep's
fair market value. Lastly, the alleged recourse promissory note
each partnership issued was not a valid recourse indebtedness.
Accordingly, we hold that RCR #4 and RCR #6 did not acquire the
benefits and burdens of ownership with respect to the breeding
sheep they each had purportedly acquired from Barnes Ranches.
See Ferrell v. Commissioner, supra at 1186-1190; Grodt & Mckay
Realty, Inc. v. Commissioner, 77 T.C. 1221, 1237-1238 (1981). We
further hold that RCR #4 and RCR #6 are not entitled to the
34On brief, petitioners assert that this Court's prior
decision in Bales v. Commissioner, T.C. Memo. 1989-568,
collaterally estops respondent from relitigating a number of
issues concerning the transactions in the instant cases.
However, petitioners failed to raise collateral estoppel as a
defense in their pleadings. The Court thus does not consider
petitioners' collateral estoppel argument to be properly before
it. In any event, collateral estoppel would not apply in the
instant cases. The Bales decision involved several cattle
breeding limited partnerships organized by Mr. Hoyt's family that
had entered into transactions to acquire breeding cattle. The
instant cases, in contrast, involve other sheep breeding limited
partnerships that entered into transactions purportedly to
acquire breeding sheep from either Barnes Ranches or W.J. Hoyt
Sons Ranches MLP. The issues in the instant cases can hardly be
said to be identical to those decided in Bales, as different
partnerships and different transactions are presented. See Peck
v. Commissioner, 90 T.C. 162, 166-167 (1988), affd. 904 F.2d 525
(9th Cir. 1990); see also Coward v. Commissioner, T.C. Memo.
1997-198.
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