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requires approximately 4 years to complete.” It further states
that those partnerships’ operating results would be reported
annually only when “their investment period is completed.”
Similar statements are also made in an earlier 1984 Annual Report
Of Operating Results Of Cattle Breeding Partnerships that the
Hoyt organization prepared. That report states that “No
partnership results have been shown for any partnerships formed
in 1983 and 1984. They, like the 1982 partnerships, are still in
the process of forming their breeding herd through a selection
process requiring, approximately 3 years.”
Notwithstanding the Hoyt organization’s failure to provide
requisite numbers of specific breeding cattle to them, many of
these partnerships formed in 1982, 1983, 1984, 1985, and 1986
filed tax returns for those years claiming deductions with
respect to their “breeding cattle herds”.7 In addition, to
support the deductions the partnerships claimed, the Hoyt
organization issued bills of sale, annual herd recap sheets, and
7The Hoyt organization prepared the tax returns for the
cattle-breeding partnerships it formed and operated. Jay Hoyt as
the managing general partner of a partnership typically signed
and filed that partnership’s return. For example, the
depreciation schedule included in DGE 84-3's 1988 return reflects
that it had “acquired” breeding herds for $4,759,500 on Feb. 1,
1984, and for $359,000 on Feb. 1, 1986, each of which it had been
depreciating over 5 years. Similarly, the depreciation schedule
included in SGE 84-5's 1987 return reflects that it had
“acquired” breeding herds for $4,826,000 on Apr. 1, 1984, and for
$350,000 on Feb. 1, 1986, each of which it had been depreciating
over 5 years.
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