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their partnership units jointly and titled their partnership
interests as joint tenancies with right of survivorship.
Petitioner wrote numerous checks to the Hoyt organization, and
the Hoyt organization issued Schedules K-1 (Form 1065), Partner’s
Share of Income, Credits, Deductions, etc., with respect to SGE
1984-3, DSBS 1987-4, and TBS JV to petitioner and Mr. Foy
jointly.
Petitioner and Mr. Foy filed joint Federal income tax
returns for 1981 through 1986 on which they claimed substantial
losses and an investment credit related to their investment in
SGE 1984-3. Following an audit and related litigation,4
respondent adjusted the Hoyt partnership losses and investment
credit claimed on petitioner and Mr. Foy’s 1981-1986 tax returns
and assessed substantial income tax deficiencies.
3(...continued)
The investors in the Hoyt partnerships assumed personal liability
for the partnerships’ promissory notes, made payments on the
notes to the Hoyt partnerships, see, e.g., Shorthorn Genetic
Engg. 1982-2, Ltd. v. Commissioner, supra, and, in return,
deducted large partnership losses related to the purchase,
management, and sale of livestock, see River City Ranches #1,
Ltd. v. Commissioner, supra; Mekulsia v. Commissioner, T.C. Memo.
2003-138, affd. 389 F.3d 601 (6th Cir. 2004); Durham Farms #1,
J.V. v. Commissioner, supra; Shorthorn Genetic Engg. 1982-2, Ltd.
v. Commissioner, supra; Bales v. Commissioner, T.C. Memo 1989-
568.
4According to respondent, the litigation regarding
petitioner and Mr. Foy’s investment in SGE 1984-3 was resolved by
this Court’s order and decision, entered on Nov. 27, 1996, in
Shorthorn Genetic Engg. 1984-3, Ltd. v. Commissioner, docket No.
24514-89.
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