River City Ranches #1 Ltd., Leon Shepard, Tax Matters Partner - Page 3

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          C.   Respondent’s Examination Efforts and Enforcement Actions               
                ............................ 17                                       
          D. Governmental Investigations of Jay Hoyt ........ 25                      
          E.   Certain Agreements Extending the Period of Limitations That            
               Jay Hoyt and the IRS Executed ............. 30                         
          OPINION ........................... 31                                      
          Issue 1.  Entitlement to Partnership Level Theft Loss Deductions            
                ............................ 32                                       
          A. The Parties’ Arguments ................. 32                              
               1. Petitioners’ Arguments .............. 32                            
               2. Respondent’s Arguments .............. 34                            
          B. Discussion of Applicable Law ............. 35                            
               1. Section 165 Theft Loss .............. 35                            
               2. Estoppel Principles ................ 37                             
                    a. Equitable Estoppel ............. 37                            
                    b. Collateral Estoppel ............ 39                            
                    c. Judicial Estoppel ............. 41                             
          C.   Discussion of Partnership Level Theft Loss Deductions . 43             
               1.   Determination of Whether the Sheep Partnerships Were              
                    Victims of Theft ................. 43                             
                    a. The Occurrence of a Theft ......... 43                         
                           (i)     Jay Hoyt’s Conviction of Federal Crimes            
                                    .................. 45                             
                           (ii)    Petitioners’ Claim That a Theft From the           
                                   Partners is a Theft From the                       
                                   Partnerships ............ 51                       
                           (iii)   Petitioners’ Claim That a Theft Occurred           
                                   Under State Law .......... 55                      
                           (iv)    Analysis of Case Law Cited by                      
                                   Petitioners ............ 61                        
                    b. The Year of Discovery Requirement ..... 65                     
                           (i)     Application of Equitable Estoppel . 67             
                           (ii)    Application of the Rod Warren Ink Case             
                                    .................. 72                             
                           (iii)   Petitioners’ Year of Discovery Claim               
                                    .................. 76                             
                    c.     The Remaining Elements of a Theft Loss ... 76              
               2.   Application of Collateral and Judicial Estoppel .. 77             
                    a. Collateral Estoppel ............ 77                            
                    b. Judicial Estoppel ............. 80                             





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