Michael W. Keller - Page 7

                                        - 7 -                                         
                    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.                 





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