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adjustments to the Hoyt partnerships’ proportionate shares of
losses generated from the acquisition, management, and sale of
Hoyt cattle were required, and the recalculated losses were
deductible by the limited partners to the extent of the partners’
adjusted bases.
The settlement agreement, which was executed after we issued
Bales in 1989, provided, in pertinent part, as follows:
• deductions for contributions to an Individual
Retirement Arrangement -- also called an
Investment Retirement Account -- are limited to
cash actually paid to custodial banks on or before
the due date of the return for which the deduction
is to be claimed.
* * * * * * *
• The total number of cattle in service and subject
to depreciation by the investor partnerships in
each of the following respective years is
1980 -- 1,736
1981 -- 2,463
1982 -- 2,388
1983 -- 2,932
1984 -- 3,476
1985 -- 4,024
1986 -- 6,409
• For Federal income tax purposes, all the cattle
are adult breeding cattle, each having an original
depreciable basis of $4,000.
• The number of cattle to be depreciated during any
year will be determined by the following method:
" The depreciable cattle in the herd of each
investor partnership will be adjusted by
multiplying the number listed in the
partnership’s books and records by the ratio
of the aggregate number of cattle in service
in all the partnerships (as indicated
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