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partnership claimed to have acquired. Accordingly, we hold that
DGE 84-3 and SGE 84-5 are not entitled to investment credits for
the years in issue.
Issue 8. Capital Gains and/or Additional Farm Income
In the respective FPAA’s issued to DF #1, SGE 82-1, DGE 84-
3, SGE 84-5, and TBS 89-1 for their 1988, 1989, 1990, 1991,
and/or 1992 tax years, respondent determined that (1) each
partnership had additional farm income from its transfer to a
Hoyt organization entity of calves produced by that partnership’s
breeding herd, and (2) certain income these partnerships reported
from the sale of some of its breeding cattle and breeding value
certificates42 was ordinary income, rather than capital gains.
As discussed supra in connection with Issue 1, the Court has
determined that, during the period covering the 1988 through 1992
tax years, SGE 82-1, DGE 84-3, SGE 84-5, and TBS 89-1 did not
acquire the benefits and burdens of ownership with respect to the
breeding cattle they purportedly acquired from the Hoyt
organization. As a result, these partnerships never owned for
tax purposes any breeding cattle to generate this income
respondent determined they had for the years in issue.
42The sharecrop agreements provided that a partnership would
still retain the breeding value certificates (i.e., essentially
the rights to any registration papers) on calves produced by its
breeding herd, even though, pursuant to the sharecrop agreement,
all calves produced were to belong to the Hoyt organization
entity that managed the partnership’s breeding herd.
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