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inexpensive vacations, and had no investments other than their
Hoyt partnership investments and a Hoyt individual retirement
account (IRA).
Hoyt Partnerships
Walter J. Hoyt III (Mr. Hoyt) was the son of a prominent
Shorthorn cattle breeder who, along with other members of his
family, organized, promoted, and operated more than 100 cattle
breeding partnerships from 1971 to 1998. Each partnership was
organized and marketed in the same manner, and Mr. Hoyt served as
the general partner of each partnership. For an overview of the
Hoyt organization, see Bales v. Commissioner, T.C. Memo. 1989-
568; see also River City Ranches #1, Ltd. v. Commissioner, T.C.
Memo. 2003-150; Mekulsia v. Commissioner, T.C. Memo. 2003-138;
Durham Farms #1 v. Commissioner, T.C. Memo. 2000-159, affd. 59
Fed. Appx. 952 (9th Cir. 2003); River City Ranches #4 v.
Commissioner, T.C. Memo. 1999-209, affd. 23 Fed. Appx. 744 (9th
Cir. 2001).
Investment in Durham Genetics Engineering 1985-1 Ltd.
In 1985 Mr. Abelein learned of the Hoyt organization from
his brother. After speaking with another friend who had invested
in the Hoyt partnerships, Mr. Abelein contacted an accountant to
inquire whether the investment was legal. Although Mr. Abelein
did not pay the accountant or provide the accountant with any of
the Hoyt promotional materials, the accountant advised him the
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