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The promotional materials further stated: “If a Partner
needs more or less Partnership loss any year, it is arranged
quickly within the office without the Partner having to pay a
higher fee while an outside preparer spends more time to make the
arrangements.”
The promotional materials clearly contemplated the tax
shelter being audited by respondent--stating at one point: “we
know we will be subject to constant audits by the I.R.S.”
After Christopher reviewed the promotional materials,
Christopher and petitioner talked about the Hoyt investment.
Petitioner did not fully understand how the Hoyt partnerships
worked because she did not carefully read the promotional
materials. Christopher, however, was always willing to discuss
the Hoyt investment with petitioner, and petitioner knew that
there were risks associated with the Hoyt investment.
In 1984, petitioner and Christopher invested in Shorthorn
Genetic Engineering 1984-2 (SGE 1984-2), a Hoyt partnership.
Christopher signed the subscription agreements when they first
invested in the Hoyt partnership. Under the heading of
ownership, the line next to joint tenants with the right of
survivorship was checked.
In 1992, petitioner also signed subscription agreements
affirming and accepting the agreements Christopher had signed
earlier. Included with the subscription agreements were powers
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Last modified: May 25, 2011