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You are now ready for the next step. As soon as
possible, please get your 1994 taxes to Laguna Tax
Service. Dave Barnes will take them, the copies of
your 1991, 1992 and 1993 returns. Laguna will
calculate your tax savings to verify what we have
figured.
On July 28, 1995, petitioner purportedly purchased 73
“Registured [sic] Durham Shorthorn Bred Heifers” and 73
“confirmed embryos” from W.J. Hoyt Sons Ranches MLP (Hoyt
Ranches) for $956,980. Hoyt determined the number of cattle
petitioner could purchase and set the purchase price without
petitioner’s input. Petitioner did not see any of the cattle
that he was purchasing. Petitioner initially thought he was
purchasing only cattle and did not realize he was also purchasing
embryos until he received the “Sales Order”, described infra.
In connection with the purchase, petitioner signed and/or
received a “Livestock Bill of Sale”, a “Certificate of Warranty”,
a “Sales Order”, a “Fifteen Year Promissory Note”, and a
“Security Agreement” on July 28, 1995.
The “Livestock Bill of Sale” (bill of sale) indicated that
petitioner, “D.B.A. Durham Genetic Engineering 1990-2”,4
purchased the Durham shorthorn cattle described on the attached
schedule for a “total purchase price” of $956,980. The schedule
included the names and other information for 73 Durham Shorthorn
heifers. The bill of sale did not mention confirmed embryos or
4 Petitioner was a partner in Durham Genetic Engineering
1990-2 J.V. (DGE). For more information, see infra note 5.
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Last modified: May 25, 2011