- 3 -
Linda Jaroff worked as a sales representative for the Software
Works! of L.A. and Allied Packaging Corp. in 1994 and for Allied
Packaging Corp. in 1995. Petitioners filed joint Federal income
tax returns for 1994 and 1995 and reported combined wages of
$98,078 for 1994 and $85,583 for 1995.
A. Petitioners’ 1994 and 1995 Income Tax Returns
The notice of deficiency in this case relates to losses
petitioners reported from their investment in the cattle breeding
operations of W.J. Hoyt Sons Ranches MLP, an entity operated by
Walter J. Hoyt III (Mr. Hoyt) (collectively referred to as the
Hoyt cattle operation).
In October 1995, petitioners purportedly purchased cattle
from the Hoyt cattle operation in exchange for a promissory note.
While the sales documents and other substantive details of the
transaction are not part of the record in this case,
correspondence between petitioners and members of the Hoyt cattle
operation indicate that the investment was intended to generate
significant operating losses that petitioners would use to reduce
or eliminate their income tax liability. Petitioners were
required to remit 75 percent of the tax refunds resulting from
the transaction to the Hoyt cattle operation, allegedly in
repayment of interest on the promissory note. As part of their
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011