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not allocate the erroneous losses of the taxpayer’s spouse’s
farming activities to her, even though she was listed as a
proprietor on their joint returns, because she made no decisions
related to the farm, her spouse withheld relevant financial
documents from her, and other than attending occasional horse
shows to support her children, the taxpayer was not involved in
the farming activity.
In Capehart v. Commissioner, T.C. Memo. 2004-268, we also
rejected petitioner’s argument for reasons that are equally
applicable to the present case. In Capehart, the taxpayer was
involved in the Hoyt partnership that generated the erroneous
losses at issue, even though her spouse initiated the investment.
The taxpayer jointly invested in the partnership with her spouse,
met with Mr. Hoyt, toured the Hoyt ranches, received promotional
and informational materials from the Hoyt partnerships, became a
partner with her spouse by signing a subscription agreement, made
calls to the Hoyt organization to obtain answers to questions
about the investment, and signed the income tax returns prepared
by the Hoyt organization. Consequently, we held in Capehart that
the erroneous items giving rise to the understatements of tax
were attributable to the taxpayer and her spouse.
As in Capehart, the record demonstrates that petitioner was
actively involved, along with Mr. Abelein, in matters relating to
their investment in DGE so that Rowe is distinguishable.
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