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giving rise to the understatement is attributable to one or both
spouses. Relying on Rowe v. Commissioner, T.C. Memo. 2001-325,
petitioner argues that the erroneous items should be attributed
to the spouse who made the decisions relating to the investment
that produced the erroneous items.
In Rowe, we declined to allocate to the taxpayer any portion
of the erroneous losses generated by the taxpayer’s spouse’s
farming activities even though the taxpayer was listed as one of
the proprietors on the joint tax returns. The taxpayer in Rowe
did not make or participate in the making of any decisions
relating to the activity, was not allowed to see the entire tax
return before it was filed, was not consulted by her spouse
before he engaged in the activity, did not sign any checks for
expenses related to the activity, and was not otherwise involved
in the farming activity.
In contrast to the facts in Rowe, the record in this case
establishes that petitioner was actively involved, along with Mr.
Capehart, in matters relating to their investment in SGE.
Petitioner and Mr. Capehart met with Mr. Hoyt, toured the Hoyt
ranches, received various promotional and informational materials
from the Hoyt partnerships, became partners by signing the
subscription agreement, and signed the income tax returns
prepared by the Hoyt organization. In addition, petitioner
arranged for an attorney to review the subscription and
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