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W.J. Hoyt Sons Management Co. would breed and board all of
petitioner’s cattle. Petitioner did not keep a copy of the board
agreement for his records.
Petitioner did not have any records of what happened to the
cattle or the embryos after he purchased them. Petitioner did
not request from Hoyt, nor did Hoyt provide, any written account
of his cattle.
Other than a $50 application fee, petitioner did not incur
any upfront costs related to his investment. However, petitioner
agreed to remit to the Hoyt organization 75 percent of any tax
refunds received. In connection with his 1991, 1992, and 1993
refunds totaling $40,740, see infra, petitioner paid to Hoyt
$30,500. In connection with his 1994 refund of $11,773, see
infra, petitioner paid to Hoyt $10,500. Petitioner also made 10
interest payments to Hoyt of $1,075 between September 8, 1995,
and May 28, 1996.
C. Petitioner’s Tax Claims
Before investment in the Hoyt organization, petitioner
usually prepared his own tax returns. On his tax returns for
1991, 1992, and 1993, petitioner reported the following:
Year Total income Total tax
1991 $81,574 $10,662
1992 70,094 9,035
1993 107,841 21,043
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