River City Ranches #1 Ltd., Jeffry Bergamyer, Tax Matters Partner - Page 26

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          cattle partnerships, the sheep partnerships, and other similar              
          partnerships that Hoyt promoted.  The fraud perpetrated by Hoyt             
          “impacted over 4,000 people and had actual and intended losses              
          exceeding $200 million.”  United States v. Hoyt, supra at 837.              
          Issue 1. Whether Partnership Transactions and the Sheep                     
                    Partnerships Lacked Economic Substance and Were Shams,            
                    and Whether There Were Partnership Asset Overvaluations           
                    and Basis Overvaluations                                          
               The Court of Appeals reversed our holding in River City                
          Ranches I that we lacked jurisdiction to make factual findings as           
          to whether the partnerships’ transactions were tax-motivated for            
          purposes of imposing section 6621(c) penalty-interest against               
          investor-partners.  Thus, the Court of Appeals remanded for us to           
          make such findings.  We have done so in our supplemental factual            
          findings set forth herein.                                                  
               We point out that many of the key facts have been stipulated           
          by the parties and are so found.  Furthermore, our prior opinion            
          in River City Ranches #4, J.V. v. Commissioner, T.C. Memo. 1999-            
          209, supports the conclusion that the activities of these                   
          partnerships lacked economic substance and were shams for each of           
          the years of their existence.  The findings in that case are                
          equally applicable to these cases because the facts and evidence            
          with respect to these partnerships’ breeding activities are the             
          same as the facts and evidence considered there.  While the                 
          proceeding in River City Ranches #4, J.V. involved only three of            

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