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the investment is required. Roberson v. Commissioner, T.C. Memo.
1996-335 (citing LaVerne v. Commissioner, 94 T.C. 637, 652-653
(1990), affd. without published opinion sub nom. Cowles v.
Commissioner, 949 F.2d 401 (10th Cir. 1991), affd. without
published opinion 956 F.2d 274 (9th Cir. 1992), and Horn v.
Commissioner, 90 T.C. 908, 942 (1988)), affd. without published
opinion 142 F.3d 435 (6th Cir. 1998).
Petitioner testified that he invested in Hoyt’s program as a
means to provide for retirement. However, other than a couple of
weeks spent milking cows, petitioner had no background in farming
or cattle ranching. Before his investment, he had not been a
partner in a partnership. Petitioner was not an expert in cattle
or embryo valuation, nor had he purchased any livestock.
Petitioner relied on Hoyt to determine the number of cattle
he could purchase. He further relied on Hoyt to establish a
purchase price of $478,490 for 73 heifers and $478,490 for 73
embryos. To facilitate this purchase, petitioner signed a
promissory note for $956,980 and testified that he believed he
would be held personally liable for the entire amount. Before
signing the note and completing the transaction, petitioner did
not see the cattle he was purchasing, nor is there any indication
that he attempted to do so.
Despite his lack of experience or expertise with ranching,
partnerships, cattle and embryo valuation, and livestock
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