Donald J. Barnes and Beverly A. Edwards, f.k.a. Beverly A. Barnes - Page 16

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               undermine people simply trying to conduct a legitimate                 
               and productive business.                                               
               In July 2001, petitioner testified in a proceeding in this             
          Court concerning her involvement in the Hoyt partnerships.6  In             
          this prior testimony, petitioner stated that when she and Mr.               
          Barnes made the investment, she was “drawn into” it because of              
          the involvement of the Barnes family, but that she felt that she            
          would be supporting the family operation and that it was her                
          “understanding that it was an investment in ranching * * * for              
          the long term”, one that would involve “some tax advantages”.               
          Petitioner further stated that she and Mr. Barnes “signed the               
          papers to enter the investment”.  Finally, petitioner testified             
          that she believed at the time of the initial investment with Mr.            
          Barnes that she was investing in “an overall ranching business”.            
               Petitioner is employed by a winery named Madrona Vineyards,            
          where she is receiving monthly wages of $757.  In addition,                 
          petitioner is receiving pension income of approximately $2,186              
          per month.  Petitioner lives with Lawrence Edwards (Mr. Edwards),           
          whom she married in 1997, in a residence that they purchased in             
          1991 for $225,000.  Petitioner’s only long-term debt obligations            
          are the monthly mortgage payment on the residence, her portion of           
          which is $360, and a monthly payment on a 2001 Jeep Cherokee of             


          6The opinion of the Court in that proceeding, which involved                
          numerous consolidated cases, is River City Ranches #1 Ltd. v.               
          Commissioner, T.C. Memo. 2003-150.                                          





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