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BEWARE OF THE PITFALLS, HOWEVER. Cattle breeding is a
risky business and may also bring an IRS examination
because it is lowering your taxes.
Another document, titled “Partnership Memorandum and Amended
Agreement of Limited Partnership”, petitioner and Mr. Bartak
received from the Hoyt organization contained the following
statements:
2. THIS PARTNERSHIP INVOLVES CERTAIN RISKS TO THE
PARTNERS, INCLUDING TAX RISKS (SEE “RISK FACTORS”)
* * *.
* * * * * * *
4. THE CONTENTS OF THIS MEMORANDUM ARE NOT TO BE
CONSTRUED AS INVESTMENT, LEGAL OR TAX ADVICE. EACH
PARTNER SHOULD CONSULT HIS OWN COUNSEL, ACCOUNTANT OR
BUSINESS ADVISOR AS TO LEGAL, TAX AND RELATED MATTERS
CONCERNING THIS INVESTMENT.
* * * * * * *
Unit holders should consider the various investment
risk factors of the Partnership, which are set forth in
“Risk Factors,” including the possibilities of adverse
tax treatment * * *.
* * * * * * *
The Partnership has not received a ruling that it will
be classified as a Partnership for Federal income tax
purposes (See “Income Tax Consequences”).
* * * * * * *
CERTAIN TAX CONSIDERATIONS. In judging whether to
subscribe for Units, a Partner should consider the tax
consequences thereof which include, among others: (a)
possible taxation of an amount in excess of proceeds
actually received on the sale of the Units and/or the
Partnership properties and on undistributed net income,
(b) the possibility that the Partnership will not be
treated as a Partnership for tax purposes * * *, (c)
the possibility that the Internal Revenue Service will
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Last modified: May 25, 2011