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Generally, the Hoyt partnerships enabled investors to
receive partnership interests without making initial capital
contributions. Investors were required to allow the Hoyt
partnerships or related entities to prepare the investors’ tax
returns, on which returns large losses would be allocated to the
partners, thereby reducing the investors’ reported tax
liabilities to zero. Related tax refunds investors received
would be returned to the Hoyt partnerships to pay the investors’
capital contributions and related fees.
Glenn traveled to Oregon to inspect a Hoyt partnership
ranch. Glenn toured the ranch and met and spoke with individuals
affiliated with the Hoyt partnerships. Petitioner did not
accompany Glenn to the ranch.
Upon returning, Glenn explained to petitioner some aspects
of the Hoyt partnerships. Petitioner told Glenn that she did not
understand the investments and that she did not want to get
involved in the Hoyt partnerships.
Despite petitioner’s objection, Glenn invested in the Hoyt
partnerships. To overcome petitioner’s objection, Glenn assured
petitioner that the investments were to be treated as his
separate investments and his responsibility and that petitioner
need not have anything to do with them.
Glenn received documents and materials relating to the Hoyt
partnerships. Included in these materials were subscription
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Last modified: November 10, 2007