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v. Commissioner, 86 T.C. 360 (1986) (partnership’s
basis; at risk under sec. 465).
In all those cases, however, the recourse notes
were given to independent third parties whose interests
did not necessarily coincide with those of the note
makers. Those cases did not involve, as does the
instant case, transactions between two organizations
created to carry out a tax shelter scheme, notes given
for amounts having no relationship to economic reality,
or notes which almost certainly would not be paid. See
Goldstein v. Commissioner, 364 F.2d 734, 740-741 (2d
Cir. 1966), affg. 44 T.C. 284 (1965); Durkin v.
Commissioner, 87 T.C. 1329, 1376-1377 (1986); Waddell
v. Commissioner, 86 T.C. 848, 902 (1986), affd. 841
F.2d 264 (9th Cir. 1988); Houchins v. Commissioner, 79
T.C. 570, 589-590 (1982).
In the instant case, we are convinced, as stated
above, that the purportedly recourse * * * notes
served merely as a facade for the support of the tax
benefits promised the investors * * *. The
possibility that the notes would be paid was illusory.
* * *
In Ferrell v. Commissioner, supra, the Court based its conclusion
regarding the invalidity of the notes on several factors: (1)
The note holder’s not being an independent party but an essential
member of the tax shelter team; (2) the amounts of the notes
being many times the value of the property acquired; (3) the
unusual form of the notes, including the extremely long term for
payment of any of the notes’ principal; and (4) the prearranged
eventual release of the investors from their “assumptions of
personal liability” on the “recourse” notes. See id. at 1186-
1190.
In the instant cases, the Court is convinced that Jay Hoyt
and the Hoyt organization never intended to enforce the cattle-
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