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Ranches #4, J.V. v. Commissioner, T.C. Memo. 1999-209, affd. 23
Fed. Appx. 744 (9th Cir. 2001), a test case in which the Tax
Court upheld respondent’s disallowance of all deductions that
three Hoyt sheep partnerships claimed for taxable years not at
issue in the instant cases.3
After concessions,4 the primary issues for decision in the
instant cases (which petitioners raised in amended petitions)
are: (1) Whether the nine Hoyt sheep partnerships are entitled
to theft loss deductions under section 165 for each of the years
at issue equal to the total cash payments made by the partners in
each such year to the partnerships; (2) whether the period of
limitations provided under section 6229 expired prior to the time
that respondent issued FPAAs to some partnerships for certain
taxable years; and (3) whether purported purchases of breeding
sheep that some partnerships reported for pre-1989 taxable years
constitute either (a) “valuation overstatement” as defined in
3 River City Ranches #4, River City Ranches #6, and OGT 90
were the partnerships at issue in this test case. The taxable
years decided were: For River City Ranches #4, 1987 and 1988,
and its years ended Sept. 30, 1989 through 1991; and for River
City Ranches #6, 1987 and 1988, and its years ended Sept. 30,
1989 through 1991. For OGT 90 the year decided was 1991.
4 The parties have resolved all of the adjustments in each
notice of final partnership administrative adjustment issued to
each of the nine sheep partnerships. Among other things,
petitioners now agree that the sheep partnerships did not acquire
the benefits and burdens of ownership of any sheep and that the
promissory note each partnership issued in connection with its
purported acquisition of sheep is not a valid indebtedness.
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