River City Ranches #1 Ltd., Leon Shepard, Tax Matters Partner - Page 66

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                    (ii) Petitioners’ Claim That a Theft From the                      
                              Partners is a Theft From the Partnerships                
               Petitioners contend that even if the Court finds that Jay               
          Hoyt’s Federal conviction does not establish theft on the                    
          partnership level, at a minimum, the conviction establishes a                
          theft from the partners.  Based on this contention and their                 
          assertion that the partners are synonymous with the partnerships,            
          petitioners conclude that the partnerships sustained a theft.                
          To reach this conclusion, petitioners argue that:  (1) Under                 
          State law, a partnership is its partners; (2) since the                      
          partnerships are aggregates of all the partners, and all the                 
          partners were defrauded, then the partnerships were defrauded;               
          (3) stealing from partners by using the partnerships as the                  
          vehicle for fraud is indistinguishable from stealing from the                
          partnerships; and (4) stealing from the partnerships is a theft              
          from the partners because the partners jointly own the                       
          partnership assets.  Petitioners have failed to cite any                     
          authority supporting these arguments.                                        
               Petitioners state that the partnership law of Oregon,                   
          Nevada, and California arguably applies to the partnerships at               
          issue.  However, only California and Nevada law applies, because             
          eight of the sheep partnerships were formed under and governed by            
          California law, with the remaining sheep partnership formed under            
          and governed by Nevada law.                                                  
               In particular, RCR #1, RCR #2, RCR #3, and RCR #4 were                  





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