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T.C. Memo. 1999-209

UNITED STATES TAX COURT

RIVER CITY RANCHES #4, J.V., WALTER J. Hoyt III, TAX MATTERS

PARTNER, ET AL.,1 Petitioners v.

COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket Nos.

9551-94,

13596-94,

384-95,

14721-95,

21630-95.

9553-94, Filed June 22, 1999.

13598-94,

387-95,

14723-95,

Walter J. Hoyt III (tax matters partner), pro se.

The following cases are consolidated herewith: River City

Ranches #6, J.V., Walter J. Hoyt III, Tax Matters Partner, docket

No. 9553-94; River City Ranches #4, J.V., Walter J. Hoyt III, Tax

Matters Partner, docket No. 13596-94; River City Ranches #6,

J.V., Walter J. Hoyt III, Tax Matters Partner, docket No. 1359894; River City Ranches #4, J.V., Walter J. Hoyt III, Tax Matters

Partner, docket No. 384-95; River City Ranches #6, J.V., Walter

J. Hoyt III, Tax Matters Partner, docket No. 387-95; River City

Ranches #4, J.V., Walter J. Hoyt III, Tax Matters Partner, docket

No. 14721-95; River City Ranches #6, J.V., Walter J. Hoyt III,

Tax Matters Partner, docket No. 14723-95; Ovine Genetic

Technology 1990, J.V., Walter J. Hoyt III, Tax Matters Partner,

docket No. 21630-95.

- 2 Timothy G. Buck and Michael D. Culy, for petitioner in

docket No. 9553-94.

Michael A. MacDonald, for petitioner in docket No. 384-95.

Catherine J. Caballero and Paul Robeck, for respondent.

MEMORANDUM OPINION

DAWSON, Judge:

This case was assigned to Special Trial

Judge Stanley J. Goldberg, pursuant to the provisions of section

7443A(b)(4) and Rules 180, 181, and 183.2

The Court agrees with

and adopts the opinion of the Special Trial Judge, which is set

forth below.

OPINION OF THE SPECIAL TRIAL JUDGE

GOLDBERG, Special Trial Judge:

Respondent issued a notice

of final partnership administrative adjustment (FPAA) to each

partnership involved in these consolidated cases determining the

adjustments in the amounts and for the taxable years as set forth

in Appendix A hereto.3

Unless otherwise indicated, all section references are to

the Internal Revenue Code in effect for the years in issue, and

all Rule references are to the Tax Court Rules of Practice and

Procedure.

The years in issue for River City Ranches #4 are 1987,

1988, its year ended Sept. 30, 1989, year ended Sept. 30, 1990,

and year ended Sept. 30, 1991. Respondent granted River City

Ranches #4 permission to change to a taxable year ended Sept. 30,

beginning with its year ended Sept. 30, 1989. The years in issue

for River City Ranches #6 are 1987, 1988, its year ended Sept.

(continued...)

- 3 After concessions, the primary issues for decision are:

(1)

Whether each of these three partnerships, River City Ranches #4,

J.V., Walter J. Hoyt III, Tax Matters Partner (RCR #4), River

City Ranches #6, J.V., Walter J. Hoyt III, Tax Matters Partner

(RCR #6), and Ovine Genetic Technology 1990, J.V., Walter J. Hoyt

III, Tax Matters Partner (OGT 90), purchased and acquired

ownership of breeding sheep that are subject to an allowance for

depreciation under section 167; (2) whether each partnership has

substantiated and is entitled to its claimed depreciation

deductions with respect to its breeding sheep for the years in

issue; (3) whether RCR #4 and RCR #6 are entitled to certain

interest deductions with respect to the promissory note each

partnership issued in connection with the purported acquisition

of its breeding sheep; (4) whether each partnership is entitled

to certain farm, guaranteed payment, and other deductions it

claimed; and (5) whether RCR #4 and RCR #6 each had certain

capital gains income and/or additional farm income for some of

the years in issue.

(...continued)

30, 1989, year ended Sept. 30, 1990, and 1991. Respondent

granted River City Ranches #6 permission to change to a taxable

year ended Sept. 30, 1989, beginning with its year ended Sept.

30, 1989. The year in issue for Ovine Genetic Technology 1990 is

1991.

- 4 Background

Some of the facts and certain documents have been stipulated

for trial pursuant to Rule 91 and are found accordingly.

The

Court incorporates the parties' stipulations in this opinion by

reference.

At the times their respective petitions herein were filed,

RCR #4, RCR #6, and OGT 90 each maintained its principal place of

business either in Burns, Oregon, or in Herald, California.

Overview

Walter J. Hoyt III (Mr. Hoyt), is a general partner of each

of the three sheep breeding partnerships that are involved in the

instant cases--RCR #4, RCR #6, and OGT 90.

From 1981 through the

time of the trial in the instant cases, Mr. Hoyt organized,

promoted to numerous investors, and operated as a general partner

a total of nine separate sheep breeding partnerships.

These nine

partnerships were formed and began operating in the years

indicated as follows:

Partnership

River City Ranches #1 (RCR #1)

River City Ranches #2 (RCR #2)

River City Ranches #3 (RCR #3)

RCR #4

River City Ranches #5 (RCR #5)

RCR #6

River City Ranches #5-2 (RCR #5-2)

Ovine Genetic Technology 1987 (OGT 87)

OGT 90

Year

1981

1982

1983

1984

1985

1986

1987

1990

- 5 RCR #4 and RCR #6 each had been formed as a California limited

partnership.4

Before 1981, Mr. Hoyt and his family for a number of years

had engaged in promoting and operating a number of cattle

breeding partnerships.

Mr. Hoyt's father was a prominent breeder

of Shorthorn cattle, one of the three major breeds of cattle in

the United States.

In order to expand his business and attract

investors, the father had started organizing and promoting cattle

breeding partnerships in the late 1960's.

One of these cattle

breeding partnerships previously was the subject of this Court's

opinion in Bales v. Commissioner, T.C. Memo. 1989-568.

Around 1978 or 1979, Mr. Hoyt became interested in the

possibility of organizing similar sheep breeding partnerships.

As a result, he began discussions with David Barnes (Mr. Barnes),

a longtime sheep breeder and childhood friend.

For a number of years, Mr. Barnes and his wife April had

owned and operated Barnes Ranches, their sole proprietorship

sheep breeding business located in the Sacramento Valley in

California.

They have a son, Randy Barnes (Randy).

After

completing college in 1985, Randy eventually took on a

substantial role in the management and operation of the business.

Although Mr. Hoyt testified that all of the partnerships

formed before 1987 had been formed as California limited

partnerships, he later indicated that a few of OGT 90's partners

may have been limited partners.

- 6 Mr. Barnes had extensive experience in breeding several

breeds of purebred sheep, including Hampshires, Rambouillets, and

Suffolks.

However, by the 1980's, he concentrated on

Rambouillets and Suffolks.

Rambouillets have white faces and

feet and cream colored bodies and are a breed noted for producing

good-quality wool.

Suffolks, on the other hand, have black faces

and legs and cream colored bodies and are a breed noted for

producing good-quality meat.

By the late 1980's, Mr. Barnes and Randy had acquired very

good reputations in purebred sheep breeding circles and were

generally considered to be among the country's top breeders of

Rambouillets and Suffolks.

During the 1980's, they typically

would enter annually between 20 to 25 of some of their best

yearling sheep in various national purebred sheep shows around

the country, and their sheep often won awards at these shows.

Substantially all of the Barnes Ranches' breeding flock

consisted of ewes, since a number of ewes would often be bred

with and serviced by one ram.

Typically, its breeding flock ewes

produced a single crop of lambs each year.

However, in some

instances certain ewes might give birth to twins, and on

relatively infrequent occasions a particular ewe might even

produce triplets.

Over the years, of the total number of lambs

produced annually, about half were females.

Only a relatively

small percentage of the lambs born, perhaps no more than 10 to 15

- 7 percent in any given year, would be added to and kept in the

Barnes Ranches breeding flock.

Ewes could have a potential

breeding life of 7 to 9 years.

However, as part of their

continuing efforts to improve their breeding flock, the Barnes

family periodically evaluated a breeding sheep's quality level

and breeding performance and would cull from their breeding flock

those sheep they judged to be unproductive or incapable of

producing offspring of sufficient quality.

With respect to the lambs the Barnes Ranches breeding flock

annually produced, the Barnes family generally would sell their

surplus and lesser quality lambs (i.e., those that were not good

candidates either for addition to the breeding flock, entry in

national show competitions, or sale to other breeders)5 after

those lambs reached a certain age.

Some of these lambs were sold

to teenagers participating in 4-H programs.

However, the vast

majority of the lambs were sold to commercial meat packing

companies.6

For instance, a breeder of lower quality sheep might

purchase a few Suffolk rams from the Barnes family in an effort

to improve the quality of that breeder's flock. This breeder's

flock operations might be geared solely to producing lambs sold

for meat. Indeed, sometimes a Suffolk ram will be bred with a

ewe of another breed, as the resulting hybrid offspring's meat

quality can often be higher than that of a nonhybrid offspring of

the ewe's breed.

Male lambs not raised for breeding purposes were castrated.

These castrated animals are called wethers.

- 8 -

The yearling sheep that the Barnes family annually entered

in national shows were often sold at auction following completion

of the particular competition.

The Barnes family owned only a limited amount of pasture in

the Sacramento Valley.

Hence they would enter into rental

arrangements to secure the additional pasture needed for Barnes

Ranches sheep operations.

In April 1981, as a result of Mr. Hoyt's and Mr. Barnes'

earlier discussions and negotiations, RCR #1 (the first sheep

breeding partnership that Mr. Hoyt organized and promoted)

entered into certain agreements with Barnes Ranches.

Pursuant to

these agreements, Barnes Ranches sold to RCR #1 a specified

number of registered purebred Rambouillet and Suffolk breeding

ewes7 for no money down and the partnership's promissory note

(the sheep sale agreement).8

In general, the promissory note

See infra note 10.

The parties disagree whether RCR #4, RCR #6, OGT 90 and the

other partnerships obtained actual ownership of specific sheep

and whether the promissory notes the partnerships issued were

valid indebtedness. The terms "sale", "sold", "purchase",

"partnership's sheep", and similar terms are used herein for

convenience and are not intended as ultimate findings or

conclusions concerning the partnerships' acquisition of sheep.

Similarly, the use herein of such terms indicating that interest

or principal payments were due should not be construed as our

conveying any legal conclusion concerning the validity of the

partnerships' promissory notes.

- 9 required the partnership to pay Barnes Ranches the stated

purchase price for the sheep over a 15-year term.

For the first

5 years, no principal payments on the note were required from the

partnership, but only annual interest payments at a specified

interest rate per annum.

Over the next 10 years, the partnership

was to pay the note's full principal amount in 10 equal annual

installments.

Barnes Ranches was further granted a security

interest in the partnership's breeding sheep, securing payment on

the partnership's promissory note.

Concurrent with their entry

into the sheep sale agreement, RCR #1 and Barnes Ranches also

entered into a 15-year management agreement (whose 15-year term

coincided with the promissory note's payment period), pursuant to

which Barnes Ranches obligated itself to undertake all management

with respect to the partnership's breeding sheep, pay all

expenses, and provide stud ram services, in exchange for

receiving all lambs produced and any culls (the sharecrop

agreement).

The sharecrop agreement further obligated Barnes

Ranches to replace any partnership ewe that could no longer serve

as a breeding ewe with another ewe of a specified quality.

addition, Barnes Ranches guaranteed that there would be a net 5percent annual increase in the size of the partnership's breeding

flock.

Except for perhaps OGT 90, each of the other later sheep

breeding partnerships that Mr. Hoyt organized, including RCR #4

- 10 and RCR #6, entered into similar sheep sale and sharecrop

agreements with Barnes Ranches.9

The separate sheep sale and

sharecrop agreements that RCR #4 and RCR #6 each entered into

with Barnes Ranches are discussed more fully infra.

The entry dates of the separate sheep sale agreements that

these eight sheep breeding partnerships (excluding OGT 90) each

concluded with Barnes Ranches, the number of breeding ewes

The evidence of record does not include written sheep sale

agreements between Barnes Ranches and each of the sheep

partnerships. Although the record contains bills of sale that

Barnes Ranches issued to eight of the nine partnerships,

respondent, among other things, asserts that these bills of sale

(1) do not accurately reflect the sheep sold to the partnerships,

and (2) are inconsistent with (a) the partnerships' returns, (b)

records Mr. Hoyt and his organization maintained on the

partnerships' sheep (e.g., annual flock recap sheets), and (c) in

some instances, petitioners' original pleadings. Also, as will

be more fully discussed infra, during or after the examinations

respondent conducted, Mr. Hoyt and his representatives originally

provided to respondent a bill of sale, dated Feb. 1, 1984,

reflecting that 1,350 sheep had been sold to RCR #4. However,

Mr. Hoyt later testified this document was only a "draft bill of

sale", and indicated that another document listing 1,468 sheep

was the actual finalized bill of sale issued by Barnes Ranch to

RCR #4 on Feb. 1, 1984. Furthermore, the parties dispute whether

OGT 90 and Barnes Ranches entered into similar sheep sale and

sharecrop agreements in 1990. Respondent contends that such

agreements were entered into, whereas petitioners contend OGT 90

entered into agreements with W.J. Hoyt Sons Ranches MLP, not with

Barnes Ranches. While no written sharecrop agreement between OGT

90 and W.J. Hoyt Sons Ranches MLP and corresponding bill of sale

listing OGT 90's purchased sheep were offered in evidence, the

record does contain a later sharecrop agreement between OGT 90

and Barnes Ranches covering a term from Oct. 1, 1993, through

Sept. 30, 2004.

- 11 petitioners contend each partnership thereby acquired,10 and each

partnership's stated purchase price for its breeding sheep are as

follows:

Partnership

Date of

Entry

Number

of Ewes

Purchase Price

RCR #1

RCR #2

RCR #3

RCR #4

RCR #5

RCR #6

OGT 87

RCR #5-2

4-20-81

2-15-82

3-20-83

2-1-84

5-1-85

1-15-86

1-5-87

2-1-87

401

514

584

1,468

1,257

1,415

1,849

1,873

$455,100

626,400

713,140

2,087,880

1,825,000

1,960,140

3,636,000

3,982,000

In their respective sharecrop agreements, Barnes Ranches and

the above partnerships agreed that, in all registration papers

obtained with respect to a partnership's breeding sheep, the

Barnes family would remain the stated owners of those sheep.

However, each sharecrop agreement required Barnes Ranches to

maintain adequate records allowing it to identify at all times a

partnership's breeding sheep.

The respective bills of sale that Barnes Ranches issued to

the above partnerships are the exclusive purportedly

contemporaneous documentation in the record listing the specific

The bills of sale issued to the partnerships, in fact,

list some rams as well as ewes. However, annual partnership

flock recap sheets (which are discussed more fully infra)

covering the respective years in which each partnership entered

into its sheep sale agreement, reflect only breeding ewes as

being initially acquired and owned throughout that year by a

partnership.

- 12 individual breeding sheep each partnership purchased when it

entered into its transaction with Barnes Ranches.

Each bill of

sale ostensibly identified all of the breeding sheep that

partnership purchased by listing and giving each individual

sheep's tag number, registration number, sex, breed, birth date,

sire's registration number, and dam's registration number.

However, as will be more fully discussed infra, petitioners have

subsequently acknowledged these bills of sale contained "numerous

errors".

As indicated previously, pursuant to the sheep sale

agreements, virtually all of the breeding sheep that these

partnerships (excluding OGT 90) acquired from Barnes Ranches were

supposed to be Rambouillet and Suffolk ewes.11

In addition,

substantially all of the breeding sheep these partnerships

acquired were supposed to be registered sheep.

In point of fact,

most of the sheep that Barnes Ranches sold to each partnership

had not actually been registered with a national sheep breed

association.

RCR #6's bill of sale, in fact, lists a very small number

of Hampshires as being acquired by that partnership. The record

does not disclose why RCR #6 would have wanted to purchase this

small number of Hampshires from Barnes Ranches. By the 1980's,

the Barnes family was concentrating on Rambouillets and Suffolks.

Further, in his testimony, Mr. Hoyt had related that each sheep

partnership's stated purpose and business was to produce

registered Rambouillets and registered Suffolks.

- 13 Notwithstanding the high quality of a particular

Rambouillet's or Suffolk's appearance and physical traits, that

sheep's lack of registration papers can dramatically reduce its

market value and the market value of its progeny for purebred

breeding purposes.

Essentially, none of the governing national

sheep breed associations will register a sheep unless that

sheep's complete ancestral line can be traced back in the

association's breed registry to the time when that sheep breed

was established.

In other words, all of that sheep's ancestors

must be registered sheep of that breed.

During the years relevant to these cases, the American

Rambouillet Sheep Breeders Association was the only generally

recognized national breed association with which purebred

Rambouillets could be registered.

During those same years,

purebred Suffolks could be registered with either of two

generally recognized national breed associations, the American

Suffolk Sheep Society or the National Suffolk Association.

A qualified individual purebred sheep of any age can be

registered with one of the above three national breed

associations.

However, the registration fee charged can be

higher for sheep that are over a specified age.

During the

period relevant to these cases, none of these three associations

physically examined a sheep being registered with it, as such

examinations of individual sheep were not feasible given the

- 14 numbers of sheep each association annually registered.

These

associations, instead, relied on a breeder to provide accurate

information in the registration application submitted to the

association.

At each of the three breed associations, the registration

process is substantially the same.

In general, a breeder must

first submit a completed registration application form for the

individual sheep.

The completed application will include the

breeder's name, the breeder's identification number for the sheep

(i.e., tag number), the sheep's date of birth and sex, and

pertinent information as to its sire and dam (primarily their

respective association registration numbers).

Association

personnel would then review the completed application and verify

the information provided on the sheep's ancestry against the

association's records.

If the registration application was

approved, then the association assigned the sheep a registration

number, made appropriate entries in the association's records,

and issued a registration certificate for that sheep to the

breeder.

No other sheep registered with the association would

have the same registration number, as each registration number

was assigned sequentially in chronological order, when the

application for that sheep had been approved and a registration

certificate was to be issued.

- 15 During the period relevant to these cases, Barnes Ranches

kept its own breeding records with respect to its sheep and those

belonging to the sheep partnerships.

It also issued breeding

certificates of its own for some of these sheep (Barnes

certificates).

Mr. Barnes was a limited partner in RCR #4.

Randy was a

limited partner in RCR #6.

The Barnes family did not employ artificial insemination

techniques with respect to their breeding sheep until at least

1987.

They began to collect and freeze semen from some of their

best rams in perhaps 1987.

It was not until at least about 1988

that they began employing embryo collection and transplant

techniques with respect to some of their best ewes.

artificial insemination techniques were ever employed with

respect to the partnership sheep that Barnes Ranches managed.

B. RCR #4's and RCR #6's Respective Bills of Sale, Promissory

Notes, Assumption Agreements, and Sharecrop Agreements

As indicated previously, the record contains only limited

transactional documentation relating to RCR #4's and RCR #6's

respective

purchases of breeding sheep from Barnes Ranches.

This documentation consists of (1) a bill of sale issued by

Barnes Ranches listing the specific individual sheep sold to each

partnership, (2) a "Full Recourse Promissory Note" issued by each

partnership for its sheep, (3) an Assumption Agreement later

- 16 issued by Mr. Hoyt in connection with each partnership's

promissory note, and (4) a sharecrop agreement between Barnes

Ranches and each partnership.

The record does not include a

written sheep sale agreement between Barnes Ranches and RCR #4 or

a written sheep sale agreement between Barnes Ranches and RCR #6,

offering memoranda for either partnership, or a partnership

agreement for RCR #6.

A bill of sale dated February 1, 1984, that Barnes Ranches

issued ostensibly lists and identifies the 1,468 specific

individual breeding sheep petitioners contend Barnes Ranches

transferred to RCR #4 pursuant to their sheep sale agreement of

that same date.

A bill of sale dated January 15, 1986, that

Barnes Ranch issued ostensibly lists and identifies the 1,415

specific individual breeding sheep Barnes Ranches transferred to

RCR #6 pursuant to their sheep sale agreement of that same date.

Substantially, all of this same information concerning specific

individual sheep that RCR #4, RCR #6, and other partnerships

purchased from Barnes Ranches is summarized in the corrected

bills of sale that petitioners later prepared and submitted in

evidence following the trial in the instant cases.

Petitioners'

corrected bills of sale are discussed more fully infra.

The RCR #4 promissory note for $2,087,880 dated February 1,

1984, that Mr. Hoyt issued to Barnes Ranches was stated to be a

"Full Recourse Promissory Note".

The note further stated that

- 17 "each and every partner" was to be personally and collectively

liable upon the note as "their respective personal liability may

appear on the books of the partnership."

Mr. Hoyt's signature

appeared twice at the bottom of the note; under one signature he

was stated to be signing the note as individual general partner

of RCR #4 and under his second signature he was stated to be

signing the note as "attorney-in-fact" for RCR #4's limited

partners.

In connection with the above RCR #4 "Full Recourse

Promissory Note", Mr. Hoyt further signed the names of 14 RCR #4

limited partners to another document dated December 31, 1984,

entitled "Certificate of Assumption of Primary Liability".

This

certificate stated that each of the undersigned limited partners

thereby agreed to be fully personally liable for all amounts owed

under RCR #4's note.

The RCR #6 promissory note for $1,960,140 dated January 15,

1986, that Mr. Hoyt issued to Barnes Ranches was stated to be a

"Full Recourse Promissory Note".

This note stated that each and

every partner was to be personally and collectively liable on the

note as "their respective personal liability may appear on the

books of the partnership".

Mr. Hoyt's signature appeared twice

at the bottom of this note; under one signature he was stated to

be signing the note as individual general partner of RCR #6 and

- 18 under the second signature he was stated to be signing the note

as attorney-in-fact for RCR #6's limited partners.

In connection with the above RCR #6 "Full Recourse

Promissory Note", Mr. Hoyt further signed the names of 17 RCR #6

limited partners to another document dated December 31, 1986,

entitled "Certificate Of Assumption Of Personal Liability".

This

certificate stated that each of the undersigned limited partners

thereby agreed to be fully personally liable for all amounts owed

under RCR #6's note.

RCR #4 and RCR #6 each entered into a sharecrop agreement

with Barnes Ranches, pursuant to which Barnes Ranches was to

provide all management and was to pay all expenses with respect

to a partnership's breeding flock over a 15-year term.

Barnes

Ranches further was obligated to replace any partnership ewe that

could no longer adequately serve as a breeding ewe with another

ewe of equal or better quality to those that partnership had

originally purchased.

Also, it guaranteed that there would be an

annual 5-percent net increase in the size of a partnership's

breeding flock.

In exchange for its services under the sharecrop

agreement, Barnes Ranches was to receive all lambs produced by a

partnership's breeding sheep, as well as any culls.

The sharecrop agreement further recognized that any

registration papers on a partnership's breeding sheep would be

taken out in the Barnes family's name.

However, the sharecrop

- 19 agreement required Barnes Ranches to know the identity and number

of a partnership's breeding sheep at all times.

Further,

although all lambs produced by a partnership's breeding sheep

during the sharecrop agreement's term were to be given to Barnes

Ranches as compensation for its management services, all

"breeding value certificates" on any male lambs born would still

belong to the partnership.

Essentially, a breeding value

certificate embodied the rights to the registration papers

obtained on that particular lamb.

C. The Time When the RCR #4 Bill of Sale Document Listing 1,468

Sheep Was Prepared

The above bill of sale for RCR #4 that Barnes Ranches issued

was not a contemporaneous document and was prepared well after

its stated date of February 1, 1984.

Among the 1,468 sheep

listed in this "February 1, 1984", bill of sale, are two Suffolk

ewes that are stated therein to have the respective registration

numbers 564033 and 573587.

See infra Appendix B, petitioners'

corrected RCR #4 bill of sale, tag no. 377 and tag no. 82-853.

However, each ewe was not registered with the American Suffolk

Sheep Society until at least after early 1986, when the ewe then

would have been assigned the registration number (564033 or

573587) shown in the bill of sale.

The evidence of record

includes certain information from American Suffolk Sheep Society

registration certificates issued for (1) the two Suffolks shown

- 20 in the RCR #4 bill of sale as having the registration numbers

564033 and 573587, and (2) 44 other Suffolks born in late 1985

and early 1986, each of which had a lower registration number

than 564033 and 573587.12

The latter 44 Suffolks could not have

been registered before the time of their births in late 1985 or

early 1986.

Thus, the two Suffolks with the higher registration

numbers 564033 and 573587 must have been registered with the

society sometime after early 1986.

As indicated previously, the

American Suffolk Society assigned its registration numbers

sequentially in chronological order when the registration

application for that particular Suffolk had been approved and a

registration certificate was to be issued.

The American Suffolk

Society registration certificate information as to (1) the two

Suffolk ewes, registration Nos. 564033 and 573587, and (2) the 44

other Suffolks born in late 1985 and early 1986, is set forth

infra in Appendix D to this Opinion.

Although a few sample registration certificates are in

evidence, the parties did not introduce into the record

registration certificates for all of the sheep. Instead, the

parties submitted a stipulated exhibit listing information from

numerous individual certificates. This stipulated exhibit covers

certificates petitioners provided to respondent prior to trial,

certificates respondent obtained from national sheep breed

associations, and certificates petitioners provided to respondent

after the trial. Unfortunately, the exhibit omits the date upon

which each registration certificate was issued. Thus, in

examining the registration certificate information on the 46

Suffolks discussed above, the Court was unable to ascertain the

specific dates upon which their American Suffolk Sheep Society

certificates were issued.

- 21 D.

Some Individual Investors' Failure To Make Payments

During the period from 1981 through 1991, a number of

investors in the eight sheep partnerships (excluding OGT 90) that

entered into transactions with Barnes Ranches failed to continue

making the specified payments required of them, including paying

their pro rata share of the payments required under their

partnership's long-term "Full Recourse Promissory Note".

Mr.

Hoyt (who was the general partner managing each partnership)

permitted all of these defaulting investors to withdraw from

their partnership.

He essentially tried to treat their

withdrawal from a partnership as having no effect upon the

potential tax benefits being claimed by the partnership's

remaining partners.

Barnes Ranches and the partnerships never sought to hold any

of the defaulting investors personally liable for the payments

they had defaulted upon.

These investors were allowed to walk

away from their partnership's long-term "Full Recourse Promissory

Note".

E. RCR #4's, RCR #6's, and OGT 90's Respective Returns for the

Years in Issue

RCR #4's returns for some of the years in issue reflect that

it originally claimed depreciation and investment tax credit on a

"Breeding Flock" placed in service on February 1, 1984, for which

its stated cost or other basis was $1,983,486.

RCR #4

depreciated this breeding flock over a 5-year period.

- 22 RCR #6's returns for some of the years in issue reflect that

it originally claimed depreciation and investment tax credit on a

"Breeding Flock" placed in service on January 5, 1986, for which

its stated cost or other basis was $1,868,139.

RCR #6

depreciated this breeding flock over a 5-year period.

OGT 90's return for 1991 reflects it claimed depreciation on

"1 sheep breeding" acquired on January 1, 1991, for which its

depreciable basis was $1,952,076.

OGT 90 depreciated this "1

sheep breeding" over a 5-year period.

On their respective returns for the years in issue, RCR #4,

RCR #6, and OGT 90 also claimed deductions for interest, other

farm expenses, guaranteed payments, and losses for sheep

suffering from drought and/or trichomoniasis.

The partnerships

claimed additional deductions for IRA contributions and other

expenses.

F. Respondent's Examinations of the Nine Sheep Partnerships; the

FPAA's Issued to RCR #4, RCR #6, and OGT 90; RCR #4's, RCR #6's,

and OGT 90's Respective Petitions; Certain Pretrial Discovery

Conducted; and Certain Evidence Offered During and After the

Trial

Respondent commenced examinations of various returns filed

by the nine sheep breeding partnerships, including the returns of

RCR #4, RCR #6, and OGT 90 for the years in issue.

During these

examinations, respondent asked the partnerships and their

representatives, among other things, to substantiate the

- 23 depreciation and other deductions claimed on the returns of the

partnerships.

In the respective FPAA's issued to RCR #4, RCR #6, and OGT

90, respondent, among other things, determined that the

partnerships had failed to substantiate many of their claimed

deductions and thus disallowed those deductions.

For instance,

with respect to the depreciation deduction RCR #4 claimed on its

breeding sheep for 1987, the FPAA issued to RCR #4 for that year

states, in pertinent part:

It has been determined that River City Ranches No. 4,

J.V., partnership is not entitled to the depreciation

expense as reported on the partnership Schedule F since

the partnership has not established the cost or

adjusted basis or existence of the assets, including

but not limited to animals, allegedly acquired by the

partnership during the taxable year 1984, or that if

acquired by the partnership during that year, that the

assets were placed in service during that year * * *

RCR #4, RCR #6, and OGT 90 filed respective petitions

seeking review of the FPAA's that had been issued to them.

its pleadings, RCR #4 originally maintained that it had acquired

a breeding flock of 1,353 sheep on February 1, 1984.

Subsequently, petitioners asserted that RCR #4 had acquired a

breeding flock of 1,468 breeding sheep on that date.

Similarly,

in its amended petition, OGT 90 alleged that it had originally

purchased a breeding flock for $2,932,753 in 1990, and this

breeding flock was placed in service in 1991.

- 24 In their respective petitions or amended petitions, RCR #4,

RCR #6, and OGT 90 claimed certain additional deductions for the

years in issue.

The total depreciation and other deductions

claimed by them now in issue are given infra in Appendix E to

this Memorandum Opinion.

During either the examinations respondent conducted of the

nine sheep partnerships' returns or pretrial discovery,

petitioners provided respondent with respective bills of sale

that Barnes Ranches issued to each partnership (excluding OGT

90), listing all of the individual sheep a partnership had

purchased.

Although petitioners first provided respondent with a

bill of sale document for RCR #4 listing 1,350 sheep, petitioners

eventually provided respondent with a second bill of sale

document for RCR #4 listing 1,468 sheep.

The individual sheep

this second RCR #4 bill of sale document lists are quite

different from those listed in the first RCR #4 bill of sale

document that originally had been provided to respondent by

petitioners.

Petitioners contend the second document was the

actual bill of sale issued on February 1, 1984, to evidence and

reflect Barnes Ranches' transfer to RCR #4 of the 1,468

individual sheep described and listed thereon.

As indicated

previously, however, this second document was prepared well after

its stated date of February 1, 1984.

- 25 During either the examinations respondent conducted or

pretrial discovery, petitioners further provided respondent with

annual flock recap sheets on the breeding sheep each of these

partnerships (excluding OGT 90) owned from 1981 through 1991 that

had been prepared by Mr. Hoyt's organization.

As indicated

previously, these annual flock recap sheets are inconsistent with

the above bills of sale for the partnerships that petitioners

provided to respondent.

Unlike the bills of sale (which list

some rams as being initially acquired by the partnerships), the

annual flock recap sheets reflect only ewes as being acquired and

owned by each partnership from the date when that partnership and

Barnes Ranches entered into their transaction, through December

31, 1991.

The 1981 through 1991 flock recap sheets are contained

infra in Appendix F to this Opinion.

During pretrial discovery, respondent also sought to inspect

and count the partnerships' sheep.

From October 7, 1992, through

February 2, 1993, respondent's expert Kempton Clark (Mr. Clark)

counted, at nine different locations, all of the sheep

petitioners contend were then owned by the partnerships, as well

as some sheep owned by others.

Mr. Clark counted a total of 131

adult male sheep and 5,469 adult female sheep.

Of the total

5,600 sheep counted by Mr. Clark, approximately 2,600 were lower

quality commercial sheep, as opposed to registered purebred

breeding sheep that had been purchased by the partnerships in

- 26 1992 from third parties unrelated to Mr. Hoyt and the Barnes

family.

The partnerships had paid average prices of either $75

or $100 per head for those lower quality sheep, and some of those

sheep may have been hybrids.

During the trial, respondent offered in evidence various

analyses of the partnerships' respective bills of sale and the

individual sheep listed thereon.

Among other things, one

analysis noted that hundreds of sheep in the bills of sale were

shown as being the offspring of a dam with the registration

number 772871.

Petitioners eventually acknowledged that the

bills of sale contained a substantial number of "errors" in

identifying the individual breeding sheep that Barnes Ranches

sold to each partnership.

At the end of the trial, the Court granted petitioners

additional time to offer registration certificates they and the

Barnes family had that tied into the bills of sale for the

partnerships and/or to submit a stipulation by the parties with

regard to such certificates.

As a result, the parties have

stipulated an exhibit into evidence summarizing the information

contained in 9,485 registration certificates issued for

individual sheep born during the period from 1965 through 1993.

Of the 9,485 registration certificates, 6,973 certificates are

from national sheep breed associations and 2,512 certificates are

Barnes certificates.

Some of the certificates had been provided

- 27 to respondent by petitioners prior to trial, other certificates

had been provided to respondent by various national sheep breed

associations, and another 105 certificates were provided by

petitioners to respondent following the trial.

The individual

registration certificates listed in the exhibit are organized by

date of birth and then by tag number.

None of these certificates

reflect a partnership to be a registered sheep's owner.

Rather,

the 9,485 certificates show either Barnes Ranches, Mr. Barnes, or

Randy to be the owner of these sheep.

Petitioners compared the above 9,485 registration

certificates to the respective bills of sale that Barnes Ranches

had issued to eight of the sheep partnerships (excluding OGT

90).13

These bills of sale have a total of 9,361 separate

entries describing and identifying individual breeding sheep sold

to these partnerships.

Of these 9,361 bills of sale entries,

petitioners have determined 4,839 entries can be matched to

certificates.

In making these 4,839 matches, petitioners

frequently had to correct some of the information in an entry to

match the information contained in a particular registration

certificate.

The parties have now further stipulated an exhibit

As indicated previously, petitioners contend that OGT 90

did not purchase its breeding sheep from Barnes Ranches.

Further, the record contains no bill of sale or other

documentation identifying the specific individual breeding sheep

petitioners assert that OGT 90 acquired from W.J. Hoyt Sons

Ranches MLP. See supra note 9.

- 28 in evidence containing petitioners' corrected bills of sale for

these eight sheep partnerships.

Petitioners' corrected bills of

sales for RCR #4 and RCR #6 are contained infra, respectively, in

Appendices B and C to this Memorandum Opinion.

The parties,

however, disagree as to the number of actual breeding sheep that

RCR #4, RCR #6, and these other partnerships acquired from Barnes

Ranches.

Respondent examined petitioners' 4,839 matches and agrees

that there are 3,176 registration certificates which essentially

match entries on petitioners' corrected bills of sale.

The

parties have stipulated an exhibit in evidence listing the

entries that respondent agrees the certificates essentially

match.

Respondent, however, does not stipulate the existence of

any of the sheep described in this exhibit; respondent only

stipulates that 3,176 of the registration certificates

essentially match these listed entries from the corrected bills

of sale.

Respondent disputes petitioners' remaining 1,663 asserted

matches.

Specifically, respondent claims:

(1) As to 1,248 of

the remaining matches, petitioners matched the same registration

certificate to more than one bill of sale entry; (2) as to 300 of

the matches, other registration certificates show those same dams

as having given birth to another lamb less than 160 days prior to

having the matched animal; and (3) as to 115 of the matches, the

- 29 match occurred after petitioners changed the tag number,

registration number, and breed information given in the original

bill of sale entry.

The parties have stipulated exhibits in

evidence identifying the matches that respondent disputes falling

into these foregoing categories.

The parties’ above posttrial stipulations relate only to the

matching of registration certificates to petitioners' corrected

bills of sale for the partnerships.

The parties agree that

neither petitioners nor respondent is to be precluded from

arguing that a partnership's breeding flock consisted of more or

fewer breeding sheep than the number of certificates matched.

A large unspecified number of the above 9,485 certificates

cover sheep that the Barnes family never sold to the

partnerships.

In their above matching efforts, petitioners did

not attempt to identify and segregate breeding sheep that were

never sold to a partnership.

For instance, none of the sheep

born in 1965 could possibly have been sold to a partnership, as

the first transaction between Barnes Ranches and one of the

partnerships occurred in 1981.

Discussion

Petitioners bear the burden of proving that respondent's

determinations in the FPAA's are incorrect.

See Rules 142(a),

240(a); Welch v. Helvering, 290 U.S. 111 (1933).

Particularly,

where respondent, as in the instant cases, has disallowed

- 30 depreciation and other deductions claimed by a partnership, it is

incumbent on petitioners to substantiate and establish the

partnership's entitlement to those deductions under the terms of

the applicable statutes permitting those deductions.

See New

Colonial Ice Co. v. Helvering, 292 U.S. 435 (1934); Karme v.

Commissioner, 673 F.2d 1062, 1065 (9th Cir. 1982), affg. 73 T.C.

1163 (1980).

Issue 1.

Depreciation Deductions

Section 167 generally allows as a depreciation deduction a

reasonable allowance for the exhaustion, wear and tear of

property used in business or of property held for the production

of income.

The person who bears the economic loss of invested

capital resulting from the exhaustion, wear and tear of business

property or property held for production of income is the one

entitled to the depreciation deduction.

See Helvering v. F. & R.

Lazarus & Co., 308 U.S. 252, 254 (1939).

In the instant cases, petitioners and respondent recognize

that for RCR #4, RCR #6, and OGT 90 to be entitled to their

claimed depreciation and certain other deductions, each

partnership must be the owner for tax purposes of the specific

numbers of breeding sheep that it allegedly purchased and placed

in service.

Respondent raises no contention that each

partnership was in an activity not engaged in for profit.

Although respondent has not asserted that each partnership's

- 31 transaction was a sham, the parties disagree to some extent with

respect to the transactions' economic substance.

They disagree

over whether each partnership's stated purchase price

approximated the then fair market value of the sheep.

They also

disagree over whether the purportedly recourse long-term notes

the partnerships issued were valid indebtedness.

For a sale to have occurred for tax purposes, the benefits

and burdens of ownership must be transferred.

See Grodt & McKay

Realty, Inc. v. Commissioner, 77 T.C. 1221, 1237-1238 (1981).

This test is a practical one, and there are no hard and fast

rules.

Instead, the transaction must be viewed as a whole, in

light of realism and practicality.

See Commissioner v. Segall,

114 F.2d 706, 709-710 (6th Cir. 1940), revg. on other grounds 38

B.T.A. 43 (1938); Harmston v. Commissioner, 61 T.C. 216, 228-229

(1973), affd. 528 F.2d 55 (9th Cir. 1976).

to be considered are:

Some of the factors

(1) Whether legal title passes; (2) how

the parties treat the transaction; (3) whether an equity in the

property was acquired; (4) whether the contract creates a present

obligation on the seller to execute and deliver a deed and a

present obligation on the purchaser to make payments; (5) whether

the right of possession is vested in the purchaser; (6) which

party bears the risk of loss or damage to the property; and (7)

which party receives the profits from the operation and sale of

the property.

See Grodt & McKay Realty, Inc. v. Commissioner,

- 32 supra at 1237-1238; see also Cherin v. Commissioner, 89 T.C. 986,

996-997 (1987).

A. Whether RCR #4, RCR #6, and OGT 90 Acquired the Benefits and

Burdens of Ownership as to Specific Breeding Sheep

For RCR #4, RCR #6, and OGT 90 to be entitled to their

claimed depreciation deductions, each partnership must establish

that it acquired the benefits and burdens of ownership as to the

specific individual breeding sheep comprising its alleged

breeding flock.

In that connection, however, the record

discloses petitioners to be in substantial difficulty in

establishing that each partnership actually acquired anywhere

near its stated number of breeding sheep.

Indeed, the evidence

petitioners presented to substantiate and identify the specific

individual breeding sheep these partnerships "owned" is

considerably lacking, exhibits major shortcomings, and, at times,

is so flawed as to raise serious doubts in the Court's mind as to

whether large numbers of the breeding sheep allegedly sold these

partnerships, in fact, existed.

No registration papers with respect to specific breeding

sheep were obtained in any partnership's name.

The almost 9,500

registration certificates (accumulated by the Barnes family over

the years) in the record reflect only the Barnes family to be the

owner of those registered sheep.

Further, from 1981 through

1987, Barnes Ranches and the Barnes family purportedly sold to

- 33 eight of the partnerships (excluding OGT 90) a far greater total

number of specific individual breeding sheep than petitioners

have been able to match to registration certificates.

Of the

total 9,361 breeding sheep entries in the bills of sale for these

eight partnerships, petitioners have been able to match just over

half to registration certificates.

Petitioners further acknowledge that there are significant

problems regarding specific individual sheep listed in the bills

of sale, and assert that numerous errors were made by the person

or persons who prepared the original bills of sale the

partnerships received.

They further concede that from the

approximately 3,000 adult breeding sheep, respondent's expert Mr.

Clark counted during pretrial discovery (which are all the sheep

petitioners contend the nine partnerships owned by about 1992,

excluding another 2,600 commercial sheep the partnerships had

purchased from unrelated third parties in 1992), it is impossible

to trace and reconstruct the specific individual depreciable

sheep the partnerships owned during the years in issue.

Incidentally, petitioners did not specify how ownership of these

3,000 breeding sheep that Mr. Clark counted was specifically held

and divided up among each of the nine sheep partnerships.14

In his testimony, Mr. Hoyt indicated that, as of the end

of 1991, the eight partnerships (excluding OGT 90) owned a total

of approximately 1,600 sheep and that OGT 90 owned approximately

(continued...)

- 34 On brief, however, petitioners attempt to gloss over and

minimize their failure and inability to identify large numbers of

the individual breeding sheep that RCR #4, RCR #6, and the other

partnerships purportedly purchased from Barnes Ranches.

Petitioners specifically argue, in pertinent part, as follows:

The petitioners acknowledge that there are

significant problems with the Schedule A's [listing and

identifying all the specific breeding sheep a

partnership ostensibly purchased from Barnes Ranches]

attached to the bills of sale. Clearly, the person or

persons who put the data into the computer which was

then placed on the Schedule A's made numerous errors.

It appears that in some cases, only the ear tag entry

may be reliable. However, even while the Respondent

recognizes that there are 3,176 matches between the

bills of sale and the registration certificate data

base, the Respondent asks the Court to totally and

entirely disregard the bills of sale. Why? Should not

the partnership be given depreciation for the animals

that the Respondent agrees are there?

The fact is, the Schedule A is just an attachment

to the bill of sale. The critical issue is not the

identification of specific animals, but whether the

partnership purchased the breeding flock it purported

to purchase. Did RCR #4 purchase 1,350 breeding

sheep?[15] The answer to that question is not found by

attacking the Schedule A, which has many errors among

the 475 entries which the parties stipulate match

(...continued)

1,300 sheep.

Petitioners contend that RCR #4 purchased 1,468, not

1,350, breeding sheep from Barnes Ranches on Feb. 1, 1984. Mr.

Hoyt testified that the bill of sale document in evidence listing

1,468 sheep, not another bill of sale document listing only 1,350

sheep, was the actual, final bill of sale that Barnes Ranches

issued. See supra note 9. However, as the Court determined in

its findings, the document Mr. Hoyt claimed was the actual bill

of sale had not been prepared until sometime after early 1986.

- 35 registration certificates. * * * The answer to the

question is found by determining how many sheep were

available to be purchased by RCR #4 in 1984. If there

were enough animals available for purchase, and the

seller and buyer both acknowledge the transaction, and

the partnership files a tax return reflecting the

transaction, then errors on the Schedule A are not

really significant.

The petitioners do not wish to minimize the fact

that better care should have been taken to prepare

correct and complete Schedule A's for attachment to the

bills of sale. However, it is the bill of sale which

effectuates the transaction, not the Schedule A. Each

bill of sale states a number of sheep purchased and

these are generally reflected in the flock recap

sheets. * * * The Respondent uses many pages of his

brief attacking the Schedule A's and the Petitioners,

acknowledging there are many errors, will not attempt

to convince this Court that an obvious error is somehow

accurate. However, this is not a concession that no

entries in the Schedule A's are accurate.

The parties have stipulated that 3,176 of the

approximately 10,000 animals sold to the partnerships

are found in both the registration certificates and the

Schedule A's. * * * Further, the 1,248 matches that

Respondent calls duplicates are duplicates because they

are reflected on more than one Schedule A. * * *

These animals could clearly have been sold to one

partnership, repossessed and resold to another

partnership. These 1,248 so-called duplicates should

be considered matches by the Court. * * * The

respondent would prefer to impugn [sic] criminal

behavior to the Petitioners before the Respondent would

admit the obvious. * * * there is nothing underhanded

in the Schedule A's. There is just a sloppy job of

data entry. The Respondent wishes to focus on the

Schedule A's. There is good reason to do so (from

Respondent's perspective) for to focus on the

registration certificates can only lead to one

conclusion--there were plenty of animals for each

partnership to purchase.

Before leaving this discussion of Schedule A's,

the Petitioners would like to ask the Court to consider

a couple of questions. If a rancher wishes to buy a

registered animal from one of the partnerships, would

- 36 the rancher, as a purchaser of registered sheep be more

interested in how the animal was characterized in the

previous transaction's Schedule A, or would the rancher

want to see the registration certificate for the animal

being purchased? The answer is obvious, the only real

paper of worth in the industry is the registration

certificate. How accurately the animal is

characterized in a Schedule A is not nearly as

important as whether there is a registration

certificate for that animal. The petitioners have

studied the data base in detail and will show the Court

* * * there were easily enough sheep for these

partnerships to purchase.

The Petitioners again note that there is no reason

to respond to the analysis of obvious errors in the

Schedules A's, and will not take up valuable time and

space doing so

Bills of Sale

As indicated in the Court's findings of fact, certain bills

of sale are the only transactional documentation in evidence

identifying and listing the individual breeding sheep that eight

of the nine sheep partnerships, including RCR #4 and RCR #6, each

purportedly acquired pursuant to a sheep sale agreement with

Barnes Ranches.

No similar bill of sale or other documentary

evidence for OGT 90 was offered.

Petitioners additionally offered extensive testimony from

Mr. Barnes and Mr. Hoyt concerning (1) their negotiations as to

(a) the specific breeding sheep that Barnes Ranches allegedly

sold to each partnership and (b) each partnership's stated

purchase price for those sheep; and (2) the preparation and

issuance by Barnes Ranches to a partnership of the bill of sale

listing that partnership's specific breeding sheep.

Mr. Barnes

- 37 and Mr. Hoyt each testified that, during their negotiations,

specified groups of breeding sheep were identified and possible

purchase prices for them were discussed.

Ultimately, Mr. Barnes

provided pertinent information to a Hoyt organization employee on

the specific breeding sheep that each partnership was supposedly

to purchase, as this employee prepared the bill of sale, along

with the Schedule A attached thereto, that Mr. Barnes then signed

and issued to a partnership.

The Court finds substantial portions of Mr. Hoyt's and Mr.

Barnes' trial testimony highly questionable and not credible.

Indeed, much of their testimony was evasive and less than

forthright.

Initially, Mr. Hoyt specifically testified that when

a partnership consummated its transaction, he and Mr. Barnes

reviewed the Schedule A attached to the bill of sale.

He further

claimed that, to the best of his knowledge, the Schedule A

(listing and identifying the specific breeding sheep that each

particular partnership purportedly purchased from Barnes Ranches)

was accurate.16

As the Court determined in its findings of fact,

Mr. Hoyt testified, on cross-examination, as follows:

Q. Okay. Mr. Hoyt, the bills of sale that we've

talked about for #4 and #6--and I'd be happy to show you

one--they're signed by David Barnes, is that correct, as the

seller?

That's my memory, yes.

Q. The attachments [i.e., Schedule A's] to the bills

of sale, who prepared those?

(continued...)

- 38 however, the RCR #4 bill of sale in evidence listing 1,468 sheep

was not a contemporaneous document and was prepared well after

its stated date of February 1, 1984.

Yet, Mr. Hoyt claimed that

it was the "finalized bill of sale" issued by Barnes Ranches to

RCR #4 on February 1, 1984, and that another document listing

1,350 sheep that had earlier been provided to respondent as the

RCR #4 bill of sale had only been a "draft bill of sale".

Similarly, Mr. Barnes initially testified that the bills of sale

(...continued)

A. I can't find a face in my memory as to who actually

put together that document.

Q. Are you familiar with the attachments? If I asked

you questions about the information contained on the

attachments, which are the list of the animals and

information about the animals, would you be the person to

ask, or would one of the Barneses be the better witness?

I am familiar with them.

Would the

Oh, I don't know.

* * *

[Barneses] also know?

That's a general question how--

Q. Did you go over the lists with David Barnes or

Randy Barnes?

With David Barnes.

Okay.

At the time of the transaction.

Q. Mr. Hoyt, the attachments to the bills of sale, to

the best of your knowledge are they--do they contain

accurate information?

Yes.

- 39 were reliable, and that he had been "comfortable" with the bill

of sale he issued to each partnership.

Petitioners have now

essentially acknowledged to be untrue these earlier factual

assertions that Mr. Barnes and Mr. Hoyt made concerning the

reliability of the bills of sale.

Petitioners state that the

bills of sale contained many "errors" and have offered in

evidence corrected bills of sale for the partnerships.

In addition, the Court finds incredible and unworthy of

belief petitioners' suggestion that Mr. Barnes and Mr. Hoyt (who

were both experienced businessmen and longtime breeders of

purebred livestock) had unknowingly participated in the issuance

of unreliable sales documents evidencing the specific breeding

sheep these partnerships purportedly purchased.

The Court

further does not believe that, over the long period from about

1981, when RCR #1 and Barnes Ranches entered into the first

transaction, through the time of the trial in the instant cases,

Mr. Barnes and Mr. Hoyt had been unaware of the many problems

with these bills of sale.

Mr. Barnes and his son Randy managed

each partnership's "breeding sheep", and the sharecrop agreement

each partnership and Barnes Ranches concurrently entered provided

the Barnes family was to maintain sufficient records allowing a

partnership's "breeding sheep" to be identified at all times.

This contractual requirement was never complied with given the

considerable difficulty petitioners now have in identifying the

- 40 specific breeding sheep each partnership purportedly had

purchased.

Mr. Hoyt was the managing general partner of each of

these partnerships, and he and his organization were responsible

for preparing each partnership's tax returns and maintaining its

records.17

Annual Flock Recap Sheets

On cross-examination by respondent's counsel, Mr. Hoyt was

asked to explain the inconsistency between the RCR #4 "finalized

bill of sale" dated February 1, 1984, listing 1,468 sheep (which

document, in fact, was prepared sometime after early 1986) and

the 1984 flock recap sheep reflecting the partnership had

acquired only 1,350 sheep during that year.

Mr. Hoyt's

explanation was that, although RCR #4 acquired 1,468 animals on

February 1, 1984, it had suffered losses to its flock causing it

to have as of the end of 1984 the 1,350 animals reflected in the

flock recap sheet.

He related that these losses to RCR #4's

flock were not reflected in the 1984 flock recap sheet because it

had been his and his organization's accounting practice, in

preparing an annual flock recap sheet for a partnership's first

According to the testimony given by Mr. Barnes and Mr.

Hoyt, no other individuals besides themselves participated in

negotiating each partnership's transaction with Barnes Ranches.

They also failed to identify and name the Hoyt organization

employees who had prepared the bills of sale, and petitioners

offered no testimony from such employees regarding the

preparation of the bills of sale.

- 41 year of operations, to reflect the number of animals in the

partnership's flock at yearend as the number of animals initially

acquired by it.

Mr. Hoyt's above testimony is not consistent with the

accounting treatment accorded RCR #1, RCR #2, and RCR #3 in the

prior annual flock recap sheets.

With respect to RCR #1, RCR #2,

and RCR #3, Mr. Hoyt maintained that it had been his

organization's practice not to account for events such as culls,

deaths, and disappearances during each of those partnership's

first year of operations.

The 1981, 1982, and 1983 flock recap

sheets, in fact, reflect each partnership as owning, as of the

end of its first year of operations, the same number of animals

specified in its bill of sale.

See infra Appendix F.

Moreover, this accounting treatment is completely contrary

to standard accounting principles because these flock recap

sheets show each partnership's breeding flock to have had no

lambs born, no sheep culled, and no deaths or disappearances.

is extremely unlikely that the alleged breeding flock each of

these partnerships purportedly acquired would, in fact, have

produced no lambs during that partnership's first year of

operations.

RCR #1 entered into its transaction with Barnes

Ranches to acquire 401 breeding sheep on April 20, 1981; RCR #2

entered into its transaction with Barnes Ranches to acquire 514

breeding sheep on February 15, 1982; RCR #3 entered into its

- 42 transaction to acquire 584 breeding sheep on March 20, 1983.

Presumably, an important incident of breeding flock ownership is

the right to benefit from any lambs produced by that flock.18

However, the above 1981, 1982, and 1983 flock recap sheets

intentionally omitted and failed to provide such material

information concerning a partnership's alleged breeding sheep

during that partnership's first year of operations.

Further, while the bills of sale reflect the eight

partnerships (excluding OGT 90) as having also acquired some rams

from Barnes Ranches, the annual flock recap sheets show each

partnership to have always owned only breeding ewes.

The Court

does not find convincing Mr. Hoyt's attempted explanation of this

discrepancy.

He claimed that the partnerships initially had

acquired these rams for various short-term breeding projects that

were terminated by the end of each partnership's first year of

operations.

However, the flock recap sheets do not reflect these

partnerships to have later "exchanged" for ewes these rams they

initially "acquired".

Further, the sharecrop agreement each

Although the sharecrop agreements provided that Barnes

Ranches, as compensation for its services, was to receive all

lambs a partnership's breeding flock produced, a partnership was

still to retain the breeding value certificates as to any male

lambs. See, however, infra, the discussion regarding breeding

value certificate transactions whereby the partnerships later

"sold" some of these "certificates" to the Barnes family.

- 43 partnership had entered already obligated Barnes Ranches to

provide stud ram services to a partnership's breeding sheep.

The Court considers the flock recap sheets Mr. Hoyt and his

organization compiled highly suspect and unreliable, as Mr. Hoyt

and his organization failed to employ good record keeping

practices and appear to have prepared the recap sheets in a

manner contrary to standard, fundamental accounting principles.

The Court also can see no good reason or justification for their

preparing these annual flock recap sheets in this highly

deficient manner--if each of these partnerships, as petitioners

maintain, indeed "owned" anywhere near the number of specific

individual breeding sheep stated in its bill of sale.

Indeed,

the Court believes that the flock recap sheets were prepared in

this manner because the requisite number of specific breeding

sheep did not exist and could not, in fact, be assigned to each

partnership.

It is also to be noted that the flock recap sheets

were, at times, inconsistent with the partnership returns Mr.

Hoyt filed.

For instance, the annual flock recap sheets reflect

that RCR #3 had no breeding sheep by 1987.

However,

notwithstanding its apparently having no sheep, on its returns

for the years 1987, 1988, and 1989, RCR #3 continued to claim and

take farming expense deductions.

Petitioners' Corrected Bills of Sale

- 44 Notwithstanding the above problems with the bills of sale

and flock recap sheets, petitioners argue that the stated number

of breeding sheep each partnership purportedly purchased and

depreciated actually existed.

Petitioners assert that each

partnership did acquire beneficial ownership of its stated number

of breeding sheep on the date when that partnership and Barnes

Ranches had entered into their transaction.

Petitioners claim

that this is established by the large number of matches

petitioners have been able to make between (1) certain

registration certificates and (2) petitioners' corrected bills of

sale for the partnerships.

The Court disagrees.

Of the total 9,361 corrected bill of sale entries covering

specific breeding sheep that Barnes Ranches purportedly sold to

eight of the partnerships, petitioners have determined that 4,839

entries can be matched to registration certificates.

However,

respondent agrees that only 3,176 of petitioners' corrected bill

of sale entries can be matched to a certificate.

These 3,176

agreed matches are allocated among the eight partnerships as

follows:

Partnership

RCR #1

RCR #2

RCR #3

RCR #4

RCR #5

RCR #6

Bill of Sale

Entries

401

514

584

1,468

1,257

1,415

Agreed Cert.

Matches

269

475

466

693

- 45 OGT 87

RCR #5-2

1,849

1,873

668

466

It is not surprising that petitioners were able to match far

from all of their 9,361 corrected bill of sale entries to

certificates.

Indeed, at trial, Mr. Barnes claimed that just a

"majority" of the breeding sheep that RCR #4 purchased from him

were actually "registered sheep".

(In giving this "majority of

the sheep" estimate, Mr. Barnes apparently counted as "registered

sheep" even sheep that had only been issued Barnes certificates.)

Similarly, during his cross-examination, Randy could not estimate

how many of RCR #6's "breeding sheep" were ultimately registered

with a national sheep breed association, but instead he

maintained that all of those sheep were "registerable" (i.e.,

capable of being registered).

As respondent points out, a registration certificate does

not conclusively establish that a sheep, though registered with a

national sheep breed association, actually existed.

Respondent

notes that the three national sheep breed associations with which

Rambouillets and Suffolks were registered, never physically

inspected or otherwise verified whether a sheep being registered

with them actually existed, but essentially they relied upon and

accepted to be true the registration application information a

breeder submitted.

Respondent further notes that Barnes’

- 46 certificates were certificates the Barnes family themselves had

issued.

In addition, petitioners, in their matching efforts, have

failed to identify and segregate sheep the Barnes family owned

but did not "sell" to the partnerships.

In fact, many of the

9,485 certificates the parties introduced in the record cover

sheep that could not have been "sold" to the partnerships under

the bills of sale.

For instance, when RCR #1 and Barnes Ranches

entered into the first sheep sale transaction in 1981, any sheep

born in 1965 would either have been dead or too old to be "sold"

as a breeding sheep to RCR #1.

Similarly, any sheep born from

1988 through 1993 would also not have been "sold" to the

partnerships, because the partnership transactions took place

from 1981 through 1987.

The Court further thinks that, in all

likelihood, other large numbers of the sheep covered in these

certificates that were born from 1966 through 1987 were also not

sold to the partnerships.19

The Court is also not satisfied that even some of the agreed

matches necessarily represent actual sheep that Barnes Ranches

had "sold" to the partnerships.

To make many of these matches,

Randy claimed that Barnes Ranches, his parents, and he,

collectively, owned in the neighborhood of 1,500 ewes during 1987

and 1988. Mr. Barnes maintained that, from 1989 through 1992,

they tried to keep the Barnes Ranches breeding flock at about

1,000 sheep.

- 47 petitioners frequently had to disregard substantial portions of

the information contained in a particular original bill of sale

entry.

For instance, certain entries in the original RCR #6 bill

of sale reflecting Rambouillets (born to a dam having the

registration number 772871) were subsequently matched by

petitioners to certificates issued by the Hampshire Association.

A comparison of (1) the information given in those RCR #6 bill of

sale entries, with (2) the information contained in the Hampshire

Association certificates to which they subsequently were matched,

is contained infra in Appendix G to this Memorandum Opinion.20

Most importantly, notwithstanding petitioners' argument to

the contrary, there are a still a number of serious questions

concerning the contemporaneous nature and reliability of the

bills of sale that Barnes Ranches originally issued.21

Rather

Petitioners' corrected RCR #6 bill of sale infra in

Appendix C, does not reflect all of the corrections that should

have been made to these original bill of sale entries, as each

corrected entry should have information identical to the

certificate to which it was matched.

The bill of sale document for RCR #4 dated Feb. 1, 1984,

listing 1,350 breeding sheep (which Mr. Hoyt claimed was only a

"draft bill of sale") has 9 Suffolks indicated to be of the

Treasure Valley bloodline. According to one of petitioner's

experts, the Treasure Valley bloodline was the premier Suffolk

bloodline during the early 1980's, and top Treasure Valley

Suffolks rams back then had sold for many thousands of dollars.

However, Randy testified that the Treasure Valley bloodline was

not a factor in the Barnes Ranches breeding flock until later in

1987 or 1988, when he first purchased a group of 15 Treasure

Valley ewes for $75,000. He further related that, at about that

(continued...)

- 48 than helping to reconcile and satisfactorily address these

questions regarding the bills of sale, upon closer examination,

petitioners' posttrial matching efforts substantially diminish

their position that the stated numbers of specific breeding sheep

the partnerships purportedly purchased, in fact, existed.

In the corrected bills of sale, included among the listed

breeding sheep that RCR #4 and RCR #6, respectively, purportedly

purchased from Barnes Ranches are large numbers of Rambouillets

and Suffolks reflected as being offspring of either (1) a

Rambouillet dam having the registration number 772871 or (2) a

Suffolk dam having the registration number 772871.

Petitioners'

corrected RCR #4 bill of sale (see infra Appendix B) lists (1)

(a) 28 individual Rambouillets born in 1982 and (b) 37 individual

Rambouillets born in 1983, all of which Rambouillet breeding

sheep are shown as being the offspring of a Rambouillet dam,

registration number 772871, and (2) (a) 12 individual Suffolks

born in 1982 and (b) 33 individual Suffolks born in 1983, all of

which Suffolk breeding sheep are shown as being the offspring of

(...continued)

time, he also made rental arrangements to obtain the use of two

Treasure Valley rams. One such ram was leased by him for 1 year

for $15,000; the second ram was leased by him for 1 year for

$10,000. He also stated that none of the 15 Treasure Valley ewes

he purchased were resold to the partnerships. In addition, it is

to be noted that the bill of sale document for OGT 87, dated Jan.

5, 1987, lists one Treasure Valley sheep and that the bill of

sale document for RCR #5-2, dated Feb. 1, 1987, lists two

Treasure Valley sheep.

- 49 a Suffolk dam, registration number 772871.

The tag numbers of

these Rambouillets and Suffolks listed in the RCR #4 corrected

bill of sale as being offspring of a dam with the registration

number 772871, are set forth infra in Appendix H to this opinion.

Similarly, petitioners' corrected RCR #6 bill of sale (see infra

Appendix C) lists (1) (a) 26 individual Rambouillets born in 1984

and (b) 123 individual Rambouillets born in 1985, all of which

Rambouillet breeding sheep are shown as being the offspring of a

Rambouillet dam, registration number 772871, and (2) (a) 92

individual Suffolks born in 1984 and (b) 6 individual Suffolks

born in 1985, all of which Suffolk breeding sheep are shown as

being the offspring of a Suffolk dam, registration number 772871.

The tag numbers of these Rambouillets and Suffolks listed in the

RCR #6 corrected bill of sale as being offspring of a dam with

the registration number 772871, are set forth infra in Appendix I

to this opinion.

The record reflects that the Barnes family had a Rambouillet

ewe with respect to which they issued a Barnes certificate and

assigned the registration number 772871.

Similarly, the Barnes

family had registered a Suffolk ewe with either the American

Suffolk Society or the National Suffolk Association that was

issued the registration number 772871.22

However, it is

Interestingly, this Suffolk ewe, registration No. 772871,

(continued...)

- 50 physically impossible for these two registered ewes to have

produced annually the high numbers of Rambouillet and Suffolk

breeding sheep attributed to them in the RCR #4 and RCR #6

corrected bills of sale.23

As the Court determined in its

(...continued)

is listed among the breeding sheep sold to RCR #4 in petitioners'

corrected RCR #4 bill of sale. The corrected RCR #4 bill of sale

further shows this ewe to have been born on Apr. 18, 1982. See

infra Appendix B, tag No. 82-3.

In this connection, David Barnes testified, on crossexamination, as follows:

Q. So, one ewe during her lifetime couldn't produce

like hundreds of offspring?

Well, yes, she could.

Q. Okay. And in--would that be true in--when you

first started in 1981 for those ewes?

A. Yes, you could if you did embryo transplanting,

yes, you could.

Would you do embryo transplants in 1981?

No, we wouldn't.

1982?

A. I think it was in about the 19--late 1989, '90,

'91, in those years we did embryo transplanting.

Q. Okay. So for ewes that were in existence earlier

than that, you wouldn't have hundreds of offspring?

No.

Okay.

We'd like to, but no.

- 51 findings, the Barnes family did not begin utilizing the

artificial insemination technique of embryo transplanting with

respect to some of their breeding ewes until at least 1988, well

after the time it concluded these transactions with RCR #4, RCR

#6, and other of the sheep partnerships.24

Further examination of petitioners' corrected bills of sale

for RCR #4 and RCR #6 also discloses improbably high numbers of

quadruplets, quintuplets, sextuplets, heptuplets, and octuplets

listed among the Rambouillets and Suffolks these partnerships

purportedly purchased from Barnes Ranches.

In the RCR #4

corrected bill of sale, the Court has identified 35 sets of

quadruplets, 22 sets of quintuplets, 7 sets of sextuplets, and 1

set of heptuplets.

These quadruplet-or-better sibling "breeding

sheep" that RCR #4 purportedly purchased are set forth infra in

Appendix J to this opinion.

Similarly, in the RCR #6 corrected

bill of sale, the Court has identified 14 sets of quadruplets, 4

sets of quintuplets, 1 set of sextuplets, and 1 set of octuplets.

These quadruplet-or-better sibling "breeding sheep" that RCR #6

purportedly purchased are set forth infra in Appendix K to this

opinion.

Petitioners' corrected bills of sale for RCR #1, RCR #2,

RCR #3, and RCR #5 also list numerous Rambouillets and Suffolks

that are shown as being offspring of a dam with the registration

number 772871 among the breeding sheep that were purportedly sold

to those partnerships.

- 52 The Court does not believe that the breeding ewes the Barnes

family owned and/or managed actually produced the numbers of

high-multiple-sibling offspring indicated in the RCR #4 and RCR

#6 corrected bills of sale.

The Barnes family did not employ

embryo transplanting with respect to some of their breeding ewes

until at least 1988.

Although Mr. Barnes claimed that his own

breeding flock ewes, as well as ewes in the partnerships'

breeding flocks, often gave birth to twins and, on occasion, even

triplets,25 he did not mention how frequently, if ever, these

ewes gave birth to quadruplet-or-higher offspring.26

Most of these quadruplet, quintuplet, sextuplet, heptuplet,

and octuplet Rambouillets and Suffolks that are listed in the RCR

#4 and RCR #6 corrected bills of sale also lack registration

certificates.

See infra Appendices J and K, reflecting those of

these listed quadruplet-or-better sibling "breeding sheep" to

which a certificate was matched.

Virtually all of the other

Rambouillets and Suffolks in these corrected bills of sale

attributed to the two dams each having the registration numbers

The sharecrop agreement a partnership and Barnes Ranches

entered, provided that Barnes Ranches was to receive all lambs

produced by that partnership's breeding sheep during the

sharecrop agreement's 15-year term.

Petitioners' RCR #5-2 and OGT 87 corrected bills of sale

also list a number of high-multiple-sibling offspring among the

"breeding sheep" that were purportedly sold to those

partnerships.

- 53 772871 lack registration certificates.

See infra Appendices H

and I, indicating those of these "breeding sheep" to which a

certificate was matched.

None of petitioners' witnesses (including Mr. Barnes and

Randy) elaborated as to why so many of these above breeding sheep

that RCR #4 and RCR #6 purportedly purchased (which sheep

petitioners and their experts argue were high quality

Rambouillets and Suffolks having values ranging from $500 to

$2,130) were never ultimately registered.

Indeed, the Court

believes that, in all likelihood, these allegedly "registerable

Rambouillets and Suffolks" were never registered with national

sheep breed associations because (1) such "breeding sheep" were

fictitious and did not exist and (2) the bill of sale parentage

asserted for them was patently dubious.

Petitioners' matching efforts have not convinced the Court

of the actual existence of anywhere close to the stated total

number of breeding sheep that purportedly were sold each

partnership.

We do not accept petitioners' claims that their

problems in substantiating each partnership's breeding sheep stem

merely from "sloppy data entry" in preparing the original bills

of sale that Mr. Barnes issued.

Indeed, we do not believe that

these many bill of sale "errors" (which petitioners have now

acknowledged) were inadvertently made without Mr. Barnes' and Mr.

Hoyt's knowledge.

The RCR #4 bill of sale that Mr. Barnes issued

- 54 reflects almost all of the 1,468 breeding sheep that were sold to

be registered sheep.

Yet, in his later testimony, Mr. Barnes

asserted that just a "majority" of the breeding sheep that RCR #4

purchased from him were actually registered sheep.

Petitioners

also offered no testimony from the employee or employees who

prepared the bills of sale.

Neither did petitioners or their

witnesses identify and name these employees.

Mr. Barnes signed and issued all of these bills of sales.

These bills of sale presumably were important ownership documents

evidencing each partnership's acquisition of beneficial ownership

of specified individual breeding sheep, and these documents

ordinarily should have been prepared with some care.

In the

respective testimony they gave at trial, Mr. Barnes and Mr. Hoyt

were silent about the numerous "errors" in these bills of sale

that petitioners have now acknowledged.

Indeed, Mr. Barnes and

Mr. Hoyt had each claimed that the bills of sale were reliable

and accurately reflected the specific individual sheep that had

been sold to the partnerships.

If, as petitioners argue, the

stated numbers of breeding sheep each partnership purportedly

purchased from Barnes Ranches truly existed, the Court then finds

inexplicable the conduct of Mr. Barnes and Mr. Hoyt over the

years and the poor records they maintained on a partnership's

"breeding sheep".

- 55 As discussed previously, the Court does not believe that

many of the breeding sheep purportedly sold by Barnes Ranches to

these partnerships, in fact, existed.

Experienced, longtime

sheep breeders, like the Barnes family, would not have then

maintained such inadequate records on the numerous individual

breeding sheep they had purportedly sold to and managed for each

partnership.

The record reflects how important proper record

keeping is in the breeding of high quality, registered purebred

sheep.

Each sharecrop agreement further required Barnes Ranches

to maintain sufficient records allowing it to identify and keep

track of a partnership's breeding sheep at all times.

Further,

if the stated numbers of breeding sheep these partnerships

"owned" actually existed, then Mr. Hoyt would not have accepted

such deficient record keeping practices with respect to each

partnership's "breeding sheep".

Not only was Mr. Hoyt the

promoter and managing general partner of each sheep partnership

since its formation, but he had extensive experience in the

breeding of purebred cattle and the operation of similar cattle

breeding partnerships.

Notwithstanding petitioners' arguments to the contrary, we

conclude that many of the breeding sheep the partnerships

allegedly purchased from Barnes Ranches did not, in fact, exist.

E. Whether a Partnership's Stated Purchase Price Reasonably

Approximated the Sheep's Fair Market Value

- 56 For the breeding flock it purportedly acquired from Barnes

Ranches, each partnership agreed to pay an average stated price

per sheep as follows:

Partnership

Total Stated

Sales Price

RCR #1

RCR #2

RCR #3

RCR #4

RCR #5

RCR #6

OGT 87

RCR #5-2

$455,100

626,400

713,140

2,087,880

1,825,000

1,960,140

3,636,600

3,982,360

Number of

Sheep in Flock

401

514

584

1,468

1,257

1,415

1,849

1,873

Avg. Price

per Sheep

$1,135

1,219

1,221

1,422

1,452

1,385

1,967

2,126

Petitioners contend the breeding sheep the partnerships

purchased had values ranging from $500 to $2,130, and that the

total stated purchase price each partnership paid was reasonable.

In doing so, they are essentially asserting the Court should

accept as correct the values placed on various individual

breeding sheep in the bills of sale that Barnes Ranches issued

these partnerships, despite the "substantial errors" that

petitioners have now acknowledged were made in these bills of

sale.

Respondent, on the other hand, contends that during 1981

through 1991, registered breeding sheep sold for amounts

substantially below the values stated in these partnerships'

bills of sale.

The Court essentially agrees with respondent.

Petitioners offered only very generalized and vague expert

testimony regarding the value of the breeding sheep the

- 57 partnerships purchased.

Their several experts opined with

respect to (1) the high quality of some of the breeding sheep the

Barnes family owned and (2) Mr. Barnes' and Randy's status in

this country as top breeders of Rambouillets and Suffolks.

These

experts then further opined and concluded that the values the

bills of sale placed on individual breeding sheep were

reasonable.

Petitioners' experts furnished little in the way of analysis

or explanation of their conclusions concerning the value of the

sheep allegedly sold the partnerships.

Further, they were basing

their opinions upon their prior exposure to only a limited number

of the Barnes family's sheep, primarily those sheep the Barnes

family had either (1) entered in various national shows or (2)

employed various artificial insemination techniques upon.

they had never examined the sheep that purportedly were sold to

the partnerships, the experts merely assumed each partnership's

sheep to be like these other very high quality sheep they knew

the Barnes family to own.

As a result, none of petitioners'

experts anticipated the sheep sold the partnerships were anything

other than high quality, registered Rambouillets or high quality,

registered Suffolks.

They further never addressed how

drastically their opinions might have to be revised if (1) a

large number of the breeding sheep a partnership purportedly

purchased did not, in fact, exist, or (2) the parentage or

- 58 registered status of many of a partnership's sheep was suspect or

unknown.27

Consequently, the Court gives little weight to these

conclusions of these experts regarding the value of the

partnerships' sheep.

The record reflects that each partnership's stated purchase

price for its breeding sheep was still substantially in excess of

the prices the Barnes family, from 1981 through 1991, realized at

auction for the yearling Rambouillets and Suffolks they had

entered at various national shows.28

These yearling sheep

represented some of best young registered breeding sheep that the

Barnes family owned.

Sales records show the Barnes family sold

such yearling sheep at auction for prices typically ranging from

$175 to $1,100, and that usually any sheep commanding a price of

$400 or more had been judged a champion or had won some other

award at that particular national show.

Obviously, many of the

animals purportedly sold the partnerships were nowhere near the

quality of a purebred breeding sheep selling for $400 or more.

Indeed, the bills of sale listed substantial numbers of animals

It is also to be noted that petitioners' experts examined

only the original bills of sale that Mr. Barnes issued (which

documents, petitioners have now acknowledged, contained numerous

"errors"), not the corrected bills of sale that petitioners

prepared after the trial. As discussed previously, however,

there are substantial problems even with these corrected bills of

sale.

In this connection, Mr. Barnes testified that the breeding

sheep "sold" to the partnerships were usually yearlings.

- 59 that apparently were never registered.

Further, the parentage of

many of the sheep in the bills of sale is either dubious or

unknown.

We conclude the stated bill of sale purchase prices for RCR

#4's and RCR #6's "breeding sheep" were many times the actual

fair market value of those "sheep".

Thus, each partnership's

stated purchase price for its sheep did not reasonably

approximate those "sheep's" fair market value.

Validity of the Partnerships' Notes

In deciding the extent to which a nonrecourse note has

economic substance, a number of cases have relied heavily on

whether the fair market value of the property acquired with the

note was within a reasonable range of its stated purchase price.

See Estate of Franklin

v. Commissioner, 544 F.2d 1045 (9th Cir.

1976), affg. 64 T.C. 752 (1975); Hager v. Commissioner, 76 T.C.

759 (1981).

See also Hilton v. Commissioner, 74 T.C. 305, 363

(1980), affd. 671 F.2d 316 (9th Cir. 1982); cf. Frank Lyon Co. v.

United States, 435 U.S. 561 (1978), where, among other things,

the buyer-lessor in a sale-leaseback transaction was personally

liable on the mortgage.

As the Court of Appeals for the Ninth

Circuit in Estate of Franklin v. Commissioner, 544 F.2d at 1048,

stated, in pertinent part:

An acquisition * * * if at a price approximately

equal to the fair market value of the property under

ordinary circumstances would rather quickly yield an

equity in the property which the purchaser could not

- 60 prudently abandon. This is the stuff of substance. It

meshes with the form of the transaction and constitutes

a sale.

No such meshing occurs when the purchase price

exceeds a demonstrably reasonable estimate of the fair

market value. Payments on the principal of the

purchase price yield no equity so long as the unpaid

balance of the purchase price exceeds the then existing

fair market value. Under these circumstances the

purchaser by abandoning the transaction can lose no

more than a mere chance to acquire an equity in the

future should the value of the acquired property

increase. * * *

In addition, even a purportedly recourse purchase note will

not be treated as true debt where payment, according to its

terms, is too contingent.

See Waddell v. Commissioner, 86 T.C.

848, 901-903 (1986), affd. 841 F.2d 264 (9th Cir. 1988).

Further, the mere labeling of a purchase note as recourse is not

controlling because substance, not form, must govern.

The note's

recourse label thus will not preclude inquiry into the adequacy

of the collateral securing an alleged purchase money debt.

See

generally Waddell v. Commissioner, supra at 901-903.

In Ferrell v. Commissioner, 90 T.C. 1154, 1186 (1988), this

Court held not to be bona fide debt for tax purposes certain

purportedly long-term recourse notes that allegedly had been

assumed by limited partner-investors, and elaborated as follows:

We are fully aware of the long line of decisions

of this Court and other courts that have dealt with

bona fide long-term recourse notes assumed by limited

partners. In those cases, the courts have given

credence to recourse notes as a basis for supporting

claimed losses or establishing section 465 "at risk"

amounts. See, e.g., Pritchett v. Commissioner, 827

- 61 F.2d 644 (9th Cir. 1987), revg. and remanding 85 T.C.

580 (1985) (at risk under sec. 465); Follender v.

Commissioner, 89 T.C. 943 (1987) (at risk under sec.

465; partnership's basis); Melvin v. Commissioner, 88

T.C. 63, 75 (1987) (at risk under sec. 465); Abramson

v. Commissioner, 86 T.C. 360 (1986) (partnership's

basis; at risk under sec. 465).

In all those cases, however, the recourse notes

were given to independent third parties whose interests

did not necessarily coincide with those of the note

makers. Those cases did not involve, as does the

instant case, transactions between two organizations

created to carry out a tax shelter scheme, notes given

for amounts having no relationship to economic reality,

or notes which almost certainly would not be paid. See

Goldstein v. Commissioner, 364 F.2d 734, 740-741 (2d

Cir. 1966), affg. 44 T.C. 284 (1965); Durkin v.

Commissioner, 87 T.C. 1329, 1376-1377 (1986); Waddell

v. Commissioner, 86 T.C. 848, 902 (1986), affd. 841

F.2d 264 (9th Cir. 1988); Houchins v. Commissioner, 79

T.C. 570, 589-590 (1982).

In the instant case, we are convinced, as stated

above, that the purportedly recourse * * * notes

served merely as a facade for the support of the tax

benefits promised the investors * * *. The

possibility that the notes would be paid was illusory.

* * *

In Ferrell v. Commissioner, supra, the Court based its conclusion

regarding the invalidity of the notes on several factors:

(1)

The note holder's not being an independent party but an essential

member of the tax shelter team; (2) the amount of the notes being

many times the value of the property acquired; (3) the unusual

form of the notes, including the extremely long term for payment

of any of the note's principal; and (4) the prearranged eventual

release of the investors from their "assumptions of personal

liability" on the "recourse" notes.

Id. at 1186-1190.

- 62 The record reflects that the partnership debt allegedly

assumed by the limited partners was not bona fide recourse debt,

as the assumption agreements Mr. Hoyt executed on behalf of the

limited partners were apparently not legally enforceable against

them.

Mr. Hoyt claimed that, pursuant to an alleged oral or

written power of attorney granted him, he had signed the limited

partners' names to an assumption agreement whereby they had each

agreed to be personally liable upon their partnership's

promissory note.

He further asserted that he was authorized to

act as the attorney-in-fact for a partnership's partners in

executing any necessary partnership documents.29

However,

according to Mr. Hoyt, all limited partners later defaulting upon

their required note payments were allowed to withdraw from their

partnership and to walk away from their partnership's alleged

recourse promissory note debt.

Mr. Hoyt indicated that, although

he consulted with an attorney, he and the Barnes family chose not

to enforce the assumption agreements and made no attempt to hold

these defaulting limited partners personally liable for the

In a similar connection, Mr. Hoyt also claimed that the

remaining partners of each limited partnership had signed an

amended partnership agreement whereby, beginning in 1986, they

had also become general partners of that partnership. The Court

is skeptical of Mr. Hoyt's foregoing testimony and does not find

it credible. At any rate, the Court doubts Mr. Hoyt and the

Barnes family ever actually intended to hold these remaining

partners personally liable on their partnership's promissory

note.

- 63 payments allegedly due from them on their partnership's purported

recourse debt.30

In this connection, Mr. Hoyt testified, on direct

examination, as follows:

Q. If a partner had assumed liability and withdrew

from the partnership and refused to pay his assumed

liabilities, how did you treat that?

A. In some cases it was the year that they withdrew.

The amount of that liability was removed from their

partnership capital account as a withdrawal. And in some

situations when I was instructed by the partner and their

power of attorney was rescinded, for example, back to the

year that it was given to me, then I removed--I made an

adjustment and removed that capital from that partner's

capital account back to the year that I was instructed to.

Q. Do I understand your testimony to mean that there

were partners that withdrew and instructed you to treat them

on the books and records of the partnership as if they were

never partners?

That's correct.

Did you agree to that?

Yes, I did.

Q. Was there a provision provided in the partnership

agreement for you to give those partners that rescinded

their agreement that kind of commitment or arrangement on

the books of the partnership?

I'm sorry.

I'm not--

If I use the term rescinded, do you understand that

Yes, I do.

Could you tell me what you understand by the term

(continued...)

term?

- 64 30

(...continued)

rescission or rescinded?

That it never took effect.

Q. Were there provisions under the partnership

agreement to allow partners to rescind?

A. I cannot think of any specific item in the

partnership agreement that gives them that right. It was-the rescission I was speaking of is the rescission of the

power of attorney they gave me that I signed--that I used to

sign the assumption agreements.

Now, when that was revoked or rescinded, then that

assumption of that liability was treated as if it never

occurred.

On cross-examination, Mr. Hoyt further elaborated as

follows:

Q. Would you give credit to the individual partners

when a sale on a foreclosed note was made for those animals

covered by the foreclosed portion?

A. I'm not sure what the word credit means, the way

you're using it.

Would you do anything to their capital accounts?

Yes.

What would you do?

A. Deduct all the capital that had been contributed to

their capital account by assuming partnership liabilities.

Q. If--so for each of those it would be--the sales on

* * * [foreclosure] would be a situation where a partner

completely walked away from the partnership. Is that right,

or not?

Walked away, or instructed me in some fashion that

(continued...)

- 65 -

(...continued)

they had repudiated their debt.

Q. So there wouldn't be any situation where a * *

[partner] would walk away or repudiate part of his or her

debt, to your recollection?

A. Nothing as a part repudiation comes to mind.

don't recall that happening.

Q. Did you keep any records on the value of the sheep

that were returned, or sold on the foreclosed notes at the

time they were returned back to the manager of the sheep

[Barnes Ranches]?

A. No, we didn't have to. We had been instructed by

counsel years ago that that should be agreed between the

partnership and Barnes Ranches that the sheep returned had

the value of the balance of the note.

right?

And these could be sheep that were any age, is that

Yes.

- 66 -

In addition, the record reflects other highly unusual

conduct by the Barnes family and Mr. Hoyt with respect to these

alleged recourse partnership debts.

As previously discussed, the

sharecrop agreements provided that a partnership would still

retain the breeding value certificates (i.e., the rights to any

registration papers obtained) on male lambs produced by its

breeding flock, even though, pursuant to the sharecrop agreement,

all male and female lambs produced were to belong to Barnes

Ranches as compensation for its services.

Mr. Hoyt claimed that

the partnerships, over the years, did sell some of their breeding

value certificates to the Barnes family, and that each

partnership reported large sums from selling such certificates on

its partnership returns.

He related that he and Randy at the

beginning of each year typically negotiated these breeding value

- 67 certificate transactions, as Randy would need to obtain the

registration paper rights held by certain partnerships on

particular male sheep he contemplated selling later that year at

various annual shows.

Mr. Hoyt specifically testified that RCR #4, on its 1989 or

1990 return, reported $260,000 of income from its sales of

breeding value certificates, and that RCR #6, on one of its later

returns, reported about $500,000 of income from its sale of

breeding value certificates.

He stated the certificate proceeds

were applied against the first principal payments that RCR #4 and

RCR #6 each owed to Barnes Ranches under their respective

"recourse promissory notes".

He added that up to that point, the

partnerships had not been reporting annually the income from

their sales of breeding value certificates.

Thus, the respective

$260,000 or $500,000 of income that each partnership reported,

for its fifth or sixth year of operation, also included some

accumulated income each partnership had derived in prior years

from selling breeding value certificates.

Although Randy did state that he and Mr. Hoyt, over the

years, had negotiated the Barnes family's purchase of breeding

value certificates held by the eight partnerships (excluding OGT

90, which petitioners contend did not enter into a transaction

with Barnes Ranches), his testimony differed from and

contradicted that of Mr. Hoyt's in important respects.

Randy

- 68 related that the Barnes family sold relatively few male sheep

necessitating their purchase of a breeding value certificate from

one of the partnerships.

He estimated that they sold only a

total of 10 to 15 such rams over the years.

He further claimed

that these 10 to 15 rams ultimately may have been sold by the

Barnes family to various third parties for prices ranging from

$500 to $1,000.31

Randy testified, on cross-examination, as follows:

Q. All right. And what happened to the lambs that came

from the partnership? What did Barnes Ranch do with those lambs?

A. Well, the partnership lambs that came back, there were-many of them would be ewe lambs and many of them would be ram

lambs or wethers. The wethers, of course, would be sold for

market. The ram lambs, if there were ram lambs deemed of value

to do something else with, we would have to contact the

partnerships, because they actually had control of the breeding

value or the--we didn't get any paperwork with those rams.

So if there were some rams that we wanted to do something

with, we'd have to refer back to them. The ewe lambs we would

keep or sell for market. The poor ones would be sold for market,

the better ones maybe kept back and used for the 10 percent

increase or the replacements in the sharecrop agreement.

Q. So I don't--I guess I'm not sure whether I understand

what happened to the ram lambs. You said that you had to contact

the partnerships because they had some control over them?

They had control of the breeding value certificates.

Okay.

A. So if we wanted to market any of those rams we would

have to contact them for breeding value certificates. If not, if

we were to castrate them we would either sell them to 4-H'ers as

wether lambs for shows and a lot of those lambs would come in top

dollar. Some of the lambs would be shipped to a feedlot or

possibly just put out on pasture until they were ready for

slaughter.

(continued...)

- 69 Randy's testimony casts considerable doubt upon the

(...continued)

Q. For the ones that weren't castrated or treated in the

way you just described, the ones that you had to get permission

from the--or talk to the partnerships about-31

Uh-huh.

--were they ultimately sold?

Some of them were.

And what kind of prices did you get?

Well, some of them were in the range of $500 to $1,000.

Q. Okay. And did the partnerships ever receive any money

from those sales?

I believe so.

Q. And which years would those have been?

all the years in this?

Have they been

A. Well, we're talking about a very few head over the 10

years that I was involved with it.

Q. What percentage of the lambs would have been sold this

way, of the ram lambs?

A. I could probably give you a better estimate in terms of

head than in terms of percentage-Q.

Okay.

--over the years.

All right.

I would estimate of probably 10 to 15 head.

Q. So there are 10 to 15 ram lambs that were sold at the

prices you mentioned?

Yes.

Is that right?

Yes.

- 70 bona fides of the "recourse promissory notes" the partnerships

issued to Barnes Ranches.

In the subsequent breeding value

certificate "transactions", the Barnes family and Mr. Hoyt placed

grossly inflated "prices" on certain breeding value certificates

"held" by a partnership, because the "transaction proceeds" were

only "applied" against the grossly inflated stated purchase price

that partnership previously purportedly agreed to pay for its

"breeding sheep".

In actuality, the Barnes family and Mr. Hoyt

never contemplated that each partnership's promissory note would

ever have to be paid by that partnership and its partners on a

genuinely recourse basis.

This conduct of the Barnes family and Mr. Hoyt is indeed

behavior not characteristic of the business world and illustrates

that the Barnes family and Mr. Hoyt were not independent parties

acting at arm's length.

Their actions evidence that they

themselves viewed the partnership notes as essentially being

illusory and having no practical economic effect and that the

notes were merely a facade to support the tax benefits that Mr.

Hoyt had promised investors in the partnerships.

See Ferrell v.

Commissioner, 90 T.C. 1154, 1186-1190 (1988); see also Hunter v.

Commissioner, T.C. Memo. 1982-126 n.17.

For the foregoing reasons and on the record presented, the

Court concludes that the partnership notes were not valid

indebtedness.

Petitioners' Failure To Substantiate OGT 90's Breeding Sheep

In comparison to the evidence they offered concerning

specific individual sheep that the other partnerships, including

- 71 RCR #4 and RCR #6, had allegedly purchased from Barnes Ranches

from 1981 through 1987, petitioners presented scant evidence to

substantiate OGT 90's alleged 1990 purchase of individual

breeding sheep from W.J. Hoyt Sons Ranches MLP.

Petitioners

submitted virtually no contemporaneous transactional documents

and records for OGT 90.

See supra note 9.

The Court further

does not find convincing Mr. Hoyt's explanation as to why no

pertinent documents and records for OGT 90 could be produced.32

Thus we conclude that petitioners have failed to produce

sufficient evidence substantiating OGT 90's claimed 1991

depreciation deduction with respect to the purported 1,301

breeding sheep" that it allegedly purchased during 1990.33

In his testimony, Mr. Hoyt indicated that OGT 90's records

and many records of the other partnerships were unavailable,

because those records had been seized by postal inspectors from

his organization's offices in 1995. However, the postal

inspector who conducted the seizure testified that shortly after

effectuating the seizure, he had provided Mr. Hoyt with an

inventory of the seized documents. This postal inspector also

related that, in response to Mr. Hoyt's and Mr. Hoyt's

representatives' later requests, he had offered them access to

the documents that had been seized. According to the postal

inspector, Mr. Hoyt was also provided with copies of all the

seized documents.

Contrary to petitioners' contention, Mr. Barnes, on crossexamination, stated that he believed that Barnes Ranches had

"sold" OGT 90 its "breeding sheep".

- 72 H.

Conclusions34

Both the RCR #4 and RCR #6 bills of sale listed large

numbers of breeding sheep which did not actually exist.

addition, the RCR #4 bill of sale was not a contemporaneous

document.

Each partnership's stated purchase price for its

breeding sheep further did not reasonably approximate the sheep's

fair market value.

Lastly, the alleged recourse promissory note

each partnership issued was not a valid recourse indebtedness.

Accordingly, we hold that RCR #4 and RCR #6 did not acquire the

benefits and burdens of ownership with respect to the breeding

sheep they each had purportedly acquired from Barnes Ranches.

See Ferrell v. Commissioner, supra at 1186-1190; Grodt & Mckay

Realty, Inc. v. Commissioner, 77 T.C. 1221, 1237-1238 (1981).

further hold that RCR #4 and RCR #6 are not entitled to the

On brief, petitioners assert that this Court's prior

decision in Bales v. Commissioner, T.C. Memo. 1989-568,

collaterally estops respondent from relitigating a number of

issues concerning the transactions in the instant cases.

However, petitioners failed to raise collateral estoppel as a

defense in their pleadings. The Court thus does not consider

petitioners' collateral estoppel argument to be properly before

it. In any event, collateral estoppel would not apply in the

instant cases. The Bales decision involved several cattle

breeding limited partnerships organized by Mr. Hoyt's family that

had entered into transactions to acquire breeding cattle. The

instant cases, in contrast, involve other sheep breeding limited

partnerships that entered into transactions purportedly to

acquire breeding sheep from either Barnes Ranches or W.J. Hoyt

Sons Ranches MLP. The issues in the instant cases can hardly be

said to be identical to those decided in Bales, as different

partnerships and different transactions are presented. See Peck

v. Commissioner, 90 T.C. 162, 166-167 (1988), affd. 904 F.2d 525

(9th Cir. 1990); see also Coward v. Commissioner, T.C. Memo.

1997-198.

- 73 depreciation deductions they claimed upon such breeding sheep for

the years in issue.

With respect to OGT 90, we previously concluded that

petitioners failed to offer sufficient evidence substantiating

OGT 90's alleged acquisition of 1,301 breeding sheep during 1990.

Consequently, we sustain respondent's determinations in the FPAA

that OGT 90 is not entitled to a depreciation deduction with

respect to such breeding sheep for 1991.

See Rules 142(a), 240

(a).

Issue 2.

Interest Deductions

As discussed supra in connection with parts E and F of Issue

1, the Court has concluded that the purported recourse promissory

notes RCR #4 and RCR #6, each issued to Barnes Ranches, were not

a valid indebtedness.

Accordingly, we hold that RCR #4 and RCR

#6 are not entitled to the interest deductions they claimed for

the years in issue.

Issue 3.

Certain Farm Deductions35

As discussed supra in connection with Issue 1, the Court has

concluded that RCR #4 and RCR #6 did not acquire the benefits and

burdens of ownership with respect to the breeding sheep each

claimed to have acquired from Barnes Ranches.

Accordingly, we

hold that RCR #4 and RCR #6 are not entitled to the farm

deductions they claimed for the years in issue.

On brief, petitioners conceded the deductions RCR #4, RCR

#6, and OGT 90 claimed for drought and/or trichomoniasis.

- 74 As also discussed supra in connection with Issue 1,

petitioners failed to substantiate OGT 90's alleged acquisition

of 1,301 breeding sheep during 1990.

Accordingly, we hold that

OGT 90 is not entitled to the farm deductions it claimed

for 1991.

Issue 4.

Deductions for Guaranteed Payments

Petitioners assert that RCR #4, RCR #6, and OGT 90 each are

entitled to deductions for the years in issue for certain

guaranteed payments each partnership made to Mr. Hoyt during

those years.

Section 707(c) allows a deduction to a partnership for

guaranteed payments to partners.

Such payments are determined

without regard to the partnership income and are payments to a

partner for services or the use of capital.

See sec. 707(c).

be deductible by the partnership, the guaranteed payments must

meet the requirements of section 162(a); they must be ordinary

and necessary expenses, reasonable in amount, and incurred in a

trade or business.

See Durkin v. Commissioner, 87 T.C. 1329,

1388 (1986), affd. on other issues 872 F.2d 1271 (7th Cir. 1989);

sec. 1.707-1(c), Income Tax Regs.

In deciding whether the payments are deductible under

section 162(a), the Court must look to the nature of the services

performed by the general partners rather than to their

designation or treatment by the partnership.

Commissioner, supra at 1388-1389.

See Durkin v.

Payments allocable to

organizational costs and syndication expenses must be

- 75 capitalized.

Organizational costs, if elected, are amortizable,

but syndication costs are not amortizable.

See secs. 263, 709.

Petitioners have the burden of proving what portion of the fee is

allocable to nondeductible capital portions and to deductible

expense portions, and such allocation must reasonably comport

with the value of the services performed.

Commissioner, supra at 1389.

See Durkin v.

Any fee for services to be rendered

in the future is not deductible in the year of expenditure.

id.

See

Whether payments to a partner represent a reasonable

compensation for services is a question of fact to be determined

on the basis of the particular circumstances of each case.

See

id.

In the instant cases, the evidence presented on the payments

these partnerships made to Mr. Hoyt during the years in issue is

most unsatisfactory.

The record includes only a copy of RCR #4's

partnership agreement.

It provides that the managing general

partner, Mr. Hoyt, is to receive a fee equal to 15 percent of

that partnership's profits upon the sale and distribution of all

partnership assets.

Copies of the partnership agreements of the

other partnership are not in the record.

Mr. Hoyt testified that he received payments from each

partnership, and that he reported these payments as income on his

individual Federal returns.

He further stated that these

payments were of two types.

According to him, the first type of

payment he received was equal to 1 percent of a partnership's

reported gross farm receipts.

The second type of payment he

- 76 received was equal to 1 percent of the capital gain income a

partnership realized from its sale of sheep each year.

He also

added that while these payment made to him were credited to his

capital account with that partnership, he was not allowed to

withdraw the funds.

He stated that he was required to leave the

funds in the partnership because it had been agreed that this was

the means by which he would establish a capital account in a

partnership.

Petitioners have failed to establish that the alleged

payments each of these partnerships made to Mr. Hoyt are

deductible under section 162(a) by that partnership.

Petitioners

provided scant information concerning (1) the nature of the

services Mr. Hoyt performed for that partnership and (2) whether

the payments represented reasonable compensation for such

services Mr. Hoyt rendered.

Thus we hold that RCR #4, RCR #6,

and OGT 90 are not entitled to the deductions for guaranteed

payments they claimed for the years in issue.36

See Durkin v.

Commissioner, supra at 1388-1389.

Issue 5.

IRA Deductions

RCR #4 and RCR #6 each claimed deductions for some of the

years in issue for alleged Individual Retirement Account (IRA)

contributions they made for certain of their partners.

It is thus unnecessary for the Court to decide whether,

for purposes of sec. 707(c), the payments Mr. Hoyt received were

determined without regard to partnership income, an issue upon

which the parties disagree.

- 77 On brief, petitioners concede that no evidence was offered

to substantiate these claimed IRA deductions.

Consequently, we sustain respondent's determinations in the

FPAA's that RCR #4 and RCR #6 are not entitled to their claimed

IRA deductions for the years in issue.

Issue 6.

See Rules 142(a), 240(a).

Capital Gains and/or Additional Farm Income

In the respective FPAA's issued to RCR #4 and RCR #6 for the

tax years 1990 and 1991, respondent determined that (1) each

partnership had additional farm income from its transfer to

Barnes Ranches of lambs produced by that partnership's breeding

flock, and (2) the income each partnership reported from the sale

of some of its breeding sheep was ordinary income, rather than

capital gains.

As discussed supra in connection with Issue 1, the Court has

determined that RCR #4 and RCR #6 did not acquire the benefits

and burdens of ownership with respect to the breeding sheep they

purportedly acquired from Barnes Ranches.

As a result, RCR #4

and RCR #6 never owned for tax purposes any breeding sheep to

generate this income respondent determined they had for the years

in issue.

Accordingly, we hold that the fiscal year capital

gains and/or other farm income adjustments for 1990 and 1991

respondent determined against RCR #4 and RCR #6 cannot be

sustained.

To reflect the foregoing and the parties' concessions,

Decisions will be entered

under Rule 155.

- 78 APPENDIX A--FPAA Adjustments

RCR #4

TYE

Adjustments

12-31-87

Total Adjustments to Ordinary Income

Depreciation expense

$416,532

Interest expense

51,579

Other farm deductions

81,746

Guaranteed payments

1,934

Other Adjustments

Self-employment income

IRA payments

12-31-88

Total Adjustments to Ordinary Income

Depreciation expense

416,532

Interest expense

126,468

Other farm deductions

52,772

Guaranteed payments

2,580

Other Adjustments

Self-employment income

IRA payments

9-30-89

537,737

4,000

Total Adjustments to Ordinary Income

Depreciation expense

24,794

Interest expense

61,792

Other farm deductions

39,719

Guaranteed payments

1,408

Other Adjustments

Self-employment income

IRA payments

9-30-90

456,400

2,000

85,470

2,000

Total Adjustments to Ordinary Income

Farm income

603,630

Interest expense

108,719

Other farm deductions

25,362

Guaranteed payments

256

Other Adjustments

Self-employment income

Other deductions

107,507

324,340

- 79 9-30-91

Total Adjustments to Ordinary Income

Farm income

29,869

Depreciation expense

79,888

Interest expense

60,000

Board expenses paid to

140,454

Barnes Ranches

Purchased sheep destroyed

85,170

due to drought/tric.

Guaranteed payments

1,405

Other Adjustments

Self-employment income

Other deductions

215,117

90,112

RCR #6

TYE

Adjustments

12-31-87

Total Adjustments to Ordinary Income

Depreciation expense

410,991

Interest expense

10,657

Other farm deductions

81,746

Guaranteed payments

924

Other Adjustments

Self-employment income

12-31-88

Total Adjustments to Ordinary Income

Depreciation expense

392,309

Interest expense

51,987

Other farm deductions

52,742

Guaranteed payments

2,580

Other Adjustments

Self-employment income

IRA payments

9-30-89

374,785

439,003

4,000

Total Adjustments to Ordinary Income

Depreciation expense

392,309

Interest expense

103,327

Other farm deductions

39,719

Guaranteed payments

398

Other Adjustments

Self-employment income

495,520

- 80 9-30-90

Total Adjustments to Ordinary Income

Farm income

1,181,920

Depreciation expense

330,985

Interest expense

2,424

Purchased sheep destroyed

32,550

due to drought/tric.

Other farm deductions

50,724

Guaranteed payments

531

Other Adjustments

Self-employment income

Other deductions

9-30-91

363,535

680,531

Total Adjustments to Ordinary Income

Farm income

Depreciation expense

Interest expense

Board expenses paid to

Barnes Ranches

Purchased sheep destroyed

due to drought/tric.

Guaranteed payments

Other Adjustments

Self-employment income

Other deductions

39,477

340,937

86,500

204,612

104,921

2,046

534,404

486,047

OGT 90

TYE

Adjustments

12-31-91

Total Adjustments to Ordinary Income

Depreciation expense

390,415

Board expenses paid to

1,437,820

Hoyt & Sons

Purchased sheep destroyed

123,838

due to drought/tric.

Other Adjustments

Self-employment income

1,950,076

- 81 APPENDIX B--Petitioners' Corrected RCR #6 Bill of Sale

BILLS OF SALE SORTED BY PARTNERSHIP

PARTNERSHIP: RCR4

ORIG.

TAG

AUDIT

TAG

ORIG.

REGIST

122

122A

123

123A

124

124A

124B

125

125A

125B

126

126A

126B

14A

14B

201

201A

202

202A

202B

202C

203

203A

203B

204

204A

204B

204C

205

205A

205B

20SC

206

206A

206C

207

207A

207B

207C

208

208A

208B

208C

209

209A

209B

209C

210

122

122A

123

124

124A

124B

125

125A

125B

126

481361

481362

481363

481364

481365

390798

762310

497911

802197

497912

497913

497914

814037

811224

814038

497915

497916

126B

14A

14B

201

201A

202

202B

202C

203

203B

204

204B

204C

205

205A

205

205C

206

206A

206

207

207B

207C

208

208B

208C

209

209B

209C

210

AUDIT

REGIST

413869

802198

802199

802200

497917

802200

497917

811225

20800

811225

20800

811226

814039

811226

814039

497920

497918

497919

ORIG. AUDIT

BREED BREED

ORIG.

DOB

AUD.

DOB

ORIG.

SIRE

AUDIT

SIRE

ORIG.

DAM

AUDIT

DAM

SUFK

RAMS

SUFK

RAMB

SUFK

RAMS

RAMB

SUFK

SUFK RAMB

RAMB

SUFK

RAMS

SUFK

RAMS

SUFK

RAMS

SUFK

RAMB

RAMS SUFK

RAMS

SUFK

82/04/12

78/04/25

80/01/01

82/10/21

82/10/11

82/10/21

82/10/24

82/10/13

82/10/24

82/10/27

82/10/15

82/10/28

82/10/15

82/10/28

82/10/15

82/10/28

82/10/15

82/10/28

82/10/20

82/11/01

82/04/00

403689

403689A

403689

737391

403689

403689S

786553

403689

786553

403689

403,689A

388171

388170A

388170

323668

403683

747431

384606

348687

747431

465921

384596

754641

368185

388, 171A

82/04/00

79/01/00

82/04/00

78/04/00

81/03/08

82/10/21

82/10/11

82/10/21

82/10/24

82/10/13

82/10/24

82/10/27

82/10/15

82/10/28

82/10/15

82/10/28

82/10/20

82/11/01

403,689A

352,601A

403,689A

390,788A

403,689A

786553

403,689A

786553

403,689A

786553

403,689A

786553

403,689A

786553

403,689A

388,171A

351,410A

388,170A

323,668A

341,122A

352,816A

384,606A

774702

384,606A

348,687A

747431

348,6877

465,9212

732843

384 , S9&

733817

384,596

754641

368,185

368,18E

- 82 BILLS OF SALE SORTED BY PARTNERSHIP

PARTNERSHIP: RCR4

ORIG.

TAG

AUDIT

TAG

210A

210B

210C

211

211A

211B

211C

212

212A

212B

212C

213

213A

214

2146

214A

214B

215

215A

215B

216

216A

216B

217

217A

217B

218

218A

218B

219

220

220A

220B

221

221A

221B

222

222A

222B

223

223A

224

224A

224B

225

225A

225B

226

210A

210B

210

211

211A

211B

211C

212

212B

212C

213

213A

214

2146

214A

214B

215

215A

215B

216

216A

216B

217

217B

218

218B

219

220

220A

220B

221

221A

221B

222

222A

222B

223

223A

224

224A

224B

225

225B

226

ORIG.

REGIST

AUDIT

REGIST

802201

811227

814038

497922

814040

497922

814040

497923

497924

497950

497924

497925

497926

811230

811231

811232

814030

497929

814042

497931

497932

811234

814041

802206

811228

497927

497928

762342

811233

497934

497935

802207

ORIG. AUDIT

BREED BREED

ORIG.

DOB

SUFK

SUFK RAMB

RAMB

SUFK

RAMB

SUFK

RAMB

SUFK

RAMB

RAMB SUFK

RAMB

RAMB SUFK

RAMB

SUFK

RAMB

SUFK

RAMB

RAMB SUFK

R-AME

SUFK

RAMB

82/11/01

82/10/27

82/11/02

82/10/27

82/11/02

82/10/27

82/11/02

82/11/14

82/11/02

82/11/03

82/12/08

80/01/15

82/11/04

82/12/15

82/11/05

82/11/06

82/12/27

82/12/28

82/11/08

82/12/28

AUD.

DOB

82/10/24

82/10/27

82/11/02

82/10/27

82/11/02

82/11/03

82/12/08

80/01/15

82/11/04

82/12/15

82/11/05

82/11/06

82/12/27

82/12/28

82/11/06

82/11/08

82/12/28

ORIG.

SIRE

403689

786553

403689

737391

403689

786553

7865S3

739670

403689

786553

403689

786553

403689

AUDIT

SIRE

786553

403,689A

786553

403,689A

786553

403,689A

7865S3

403,689A

786553

739670

403,689A

786553

403,689A

786553

403,689A

786553

ORIG.

DAM

368185

732877

352815

772871

352815

403688

403687

749171

754553

747438

390792

747432

390790

390789

747437

390789

388170

AUDIT

DAM

769218

732877

352,816A

732877

352,815A

403,688A

749171

403,687A

749171

403,687A

754643

747438

390,792A

747432

390,790A

390,789A

747437

774676

390,789A

388,170A

774676

- 83 BILLS OF SALE SORTED BY PARTNERSHIP

PARTNERSHIP: RCR4

ORIG.

TAG

AUDIT

TAG

226A

226B

226C

227

227A

227B

227C

228

228A

228B

228C

229

229A

229B

229C

230

230A

230B

230C

231A

232

232A

232B

233

233A

233B

234

234A

235

235A

235B

236

236A

237

237A

237B

237C

238

238A

238B

238C

239

239A

226A

226B

226C

227

227A

227B

227C

228

228A

228

228C

229

229B

229C

230

230B

230C

231

232

232B

233

233B

234

234A

235

235A

235B

236

237

237A

237B

237C

238

238A

238B

238C

239

239A

ORIG.

REGIST

AUDIT

REGIST

802207

497936

8114235

497936

497937

811236

497938

811237

497938

497939

802208

497939

802209

497940

811238

526204

814043

497941

802210

497941

802211

497943

811239

497943

811239

802212

497945

802213

497945

49794S

497946

802214

497946

497947

802215

497944

ORIG. AUDIT

BREED BREED

ORIG.

DOB

SUFK

PAMB

SUFK

RAMB

SUFK

RAMB

RLAMB

SUFK

RAMB

SUFK

RAMB

SUFK

RAMB

SUFK

RAMB

SUFK

RAMB

SUFK

RAMB

SUFK

RAMB

SUFK

RAMB

SUFK

RAMB

SUFK

RAMB

SUFK

RAMB

RAMB SUFK

SUFK

RAMB

SUFK

RAMB

SUFK

RAMB

82/11/08

82/12/28

82/11/08

83/01/06

82/11/08

83/01/06

82/11/09

83/01/06

82/11/09

83/01/07

82/11/09

83/01/07

82/11/06

83/01/07

82/11/06

83/01/11

82/11/07

83/01/30

82/11/07

83/01/30

82/11/07

83/02/20

82/11/07

83/02/20

82/11/09

83/02/20

82/11/09

83/02/20

82/11/10

83/02/20

82/11/10

82/11/12

83/02/20

82/11/12

83/02/20

AUD.

DOB

82/11/08

82/02/00

82/11/09

83/01/06

82/11/09

83/01/07

82/11/06

83/01/07

83/01/11

82/11/07

83/01/30

81/10/14

82/11/07

83/02/20

82/11/09

83/02/20

82/11/10

83/02/20

82/11/12

83/02/20

82/11/12

83/02/20

ORIG.

SIRE

403689

786553

403689

403816A

786553

403689

737391

403689

AUDIT

SIRE

403,689A

423,295A

403,689A

786553

403,689A

786553

403,689A

786553

403,689A

786553

441,795A

403,689A

786553

403,689A

786553

403,689A

7865S3

403,689A

786553

403,689A

786SS3

ORIG.

DAM

388170

774673

774680

388171

777130

754642

368192

772871

472118

472114

403682

403688

AUDIT

DAM

388,170A

413,875A

323,668A

774673

323,668A

774680

388,171A

774680

777130

368,192A

754642

396,569A

368,192A

774672

779130

472,118A

779130

785468

472,114A

785468

403,682A

777133

403,682A

777133

- 84 BILLS OF SALE SORTED BY PARTNERSHIP

PARTNERSHIP: RCR4

ORIG.

TAG

AUDIT

TAG

ORIG.

REGIST

AUDIT

REGIST

239B

240

240A

240B

240C

241

241A

241B

242

242A

242B

243

243A

243B

244

244A

244B

245

245A

245B

246

246A

247

247A

247B

247C

248

248A

249

249A

249B

250

250A

250B

251

251A

251B

251C

252

252A

239B

240

240A

240

241

241A

241B

242

242A

242B

243

24313

244

244A

24413

245

245B

246

247

247A

2478

247C

248

248A

249

249A

249B

250

250B

251

251A

251B

251C

252

252A

802216

497948

564029

497949

811240

497949

814042

497950

811241

8104041

497951

442280

497951

497952

805273

497952

497953

805274

805275

497969

4979S4

805276

497954

497955

805277

24800

497955

497956

805278

497956

497957

442270

805279

497958

805280

4978958

4979S8

805281

ORIG. AUDIT

BREED BREED

ORIG.

DOB

SUFK

RAMB

SUFK

RAMB

SUFK

RAMB

SUFK

RAMB

SUFK

RAMB

SUFK

RAMB

RAMB SUFK

SUFK

RAMB

SUFK

RAME

SUFK

RAMB

R-AMB

SUFK

RAME

RAMB

SUFK

PAMB

RAME

SUFK

RAMB

82/11/12

83/01/20

82/11/14

83/02/21

82/11/14

83/02/21

82/11/14

83/02/21

82/11/15

82/11/1S

82/11/15

83/02/21

82/11/15

82/11/20

83/02/21

82/11/21

83/02/23

82/11/21

83/02/23

83/02/26

82/11/21

82/11/22

83/02/23

82/11/22

83/02/02

83/02/23

82/11/24

83/02/23

82/11/24

83/02/24

AUD.

DOB

83/02/20

82/11/14

82/01/28

82/11/14

83/02/21

82/11/14

83/02/21

82/11/15

80/01/31

82/11/15

83/02/21

82/11/20

83/02/21

82/11/20

82/11/21

83/02/23

82/11/21

83/02/23

82/11/22

83/02/23

82/11/22

80/01/16

83/02/23

82/11/24

83/02/23

83/02/24

ORIG.

SIRE

403689

N117869M

786553

441795A

403689

786553

403689A

403689

786553

512959A

786553

403689A

307047A

403816A

403689

N117869M

AUDIT

SIRE

786553

403,689A

N117869M

403,689A

786553

403,689A

786553

403,689A

441,79SA

403,689A

786553

403,689A

786553

403,689A

786553

403,689A

786553

403,689A

786553

403,689A

441,795A

786553

403,689A

786553

ORIG.

DAM

403688

N304275F

777129

413869A

390795

754548

472120A

472154

777131

733817

777131

384611

779089

481392

N207028F

AUDIT

DAM

777133

472,140A

N304275F

472,140A

777129

472,140A

777129

390,795A

413,869A

390,795A

774700

472,120A

754548

472,120A

472,154A

777131

472,154A

777131

384,611A

777131

384,611A

416,409A

779089

481,392A

779089

777135

- 85 BILLS OF SALE SORTED BY PARTNERSHIP

PARTNERSHIP: RCR4

ORIG.

TAG

AUDIT

TAG

ORIG.

REGIST

253

253A

253B

253C

254

254A

254B

255

255A

255B

255C

256

256A

256B

257

257A

257B

258

258B

259

259A

259B

259C

260

260A

260B

261

261A

262

262A

262B

263

263A

264

264A

265

265A

26SB

266

266A

267

267A

267B

268

253

253B

253

254

254A

25413

255

255A

2558

255C

256

256A

256B

257

257B

258

259

259A

259B

259C

260

260A

260B

261

261A

262

262A

262B

263

263A

264

264A

265

265A

265B

266

266A

267

267A

267B

268

811242

497960

814040

497960

AUDIT

REGIST

564026

805282

497961

497962

805283

479962

497962

497963

805284

497963

25700

805286

497965

805287

497965

497966

805288

497966

805288

26000

805289

805290

805291

802217

802218

802219

802220

802221

497964

805285

564028

ORIG. AUDIT

BREED BREED

ORIG.

DOB

AUD.

DOB

ORIG.

SIRE

AUDIT

SIRE

ORIG.

DAM

AUDIT

DAM

RAMB

SUFK

RAMB

SUFK

SUFK RAME

SUFK

RAMB

SUFK

RAMB

SUFK

SUFK RAMB

SUFK

RAMB

RAMB SUFK

SUFK

RAMB

SUFK

RAMB

SUFK

RAMB

SUFK

RAMB

83/02/24

82/11/25

83/02/24

82/11/25

83/02/02

82/11/25

83/02/02

82/11/25

83/02/25

82/11/25

82/11/26

83/02/2S

82/11/26

83/02/01

83/02/23

83/02/26

82/11/27

83/02/26

82/11/27

83/02/26

82/11/27

83/02/26

83/02/23

83/02/26

83/02/27

82/10/08

82/10/09

82/10/10

83/02/24

82/11/25

811242

786553

403,689A

777135

779086

403677

792310

N30432OF

472155

777134

749170

777137

772871

777135

403,677A

RAMB

82/02/05

83/02/25

82/11/25

83/02/25

82/11/26

83/02/25

82/11/26

83/02/25

83/02/26

82/02/07

82/11/27

83/02/26

82/11/27

83/02/26

83/02/27

82/10/08

82/10/09

82/10/10

307047A

403689

786553

N117869M

403689

786553

739670

737391

468,219A

786553

403,689A

786553

403,689A

786553

403,689A

786553

N117869M

403,689A

786553

403,689A

786553

739670

739G70

739670

N331603F

779086

403,677A

779086

481,393A

792310

481,393A

792310

792309

N304320F

472,155A

792309

472,138A

777134

749170

777137

757119

757118

- 86 BILLS OF SALE SORTED BY PARTNERSHIP

PARTNERSHIP: RCR4

ORIG.

TAG

AUDIT

TAG

ORIG.

REGIST

268A

269

269A

269B

271

271A

271B

272

272A

272B

273

273A

273B

274

274A

276

277

277A

278

278A

279

279A

280

280A

281

281A

282

282A

82B

283

283A

284

284A

284B

285

285A

286

286A

287

d287A

288

288A

290

290A

290B

291

291A

292

292A

293

268A

269

269A

269B

271

271A

271B

272

272A

272B

273

273A

273b

274

274A

276

277

277A

278

278A

279

279A

280

280A

281

281A

282

282A

282B

283

283A

284

284A

284B

285

285A

286

286A

287

287A

288

288A

290

290A

290B

291

291A

292

292A

293

802221

802222

802224

802225

802226

802227

811243

811244

802229

802230

802231

802232

802233

802234

802235

802236

811245

811246

805305

80530S

AUDIT

REGIST

805307

805308

805309

805310

ORIG. AUDIT

BREED BREED

ORIG.

DOB

RAMS

PAMB

RAMS

RAMB

RAMS

RAMB

RAMS

RAMB

RAMS

RAMB

RAMS

SUFK

RAMS

82/10/10

82/10/12

83/01/06

83/02/11

82/11/06

83/02/14

83/02/15

83/02/17

83/02/18

83/02/25

83/02/13

83/02/25

RAMS

AUD.

DOB

82/10/10

82/10/12

83/01/06

83/02/11

82/11/06

83/02/14

83/02/15

83/02/17

83/02/18

83/02/25

ORIG.

SIRE

737391

739670

737391

787203

739670

737391

739670

737391

786553

'786553

786553

403816A

737391

786553

AUDIT

SIRE

739670

786553

ORIG.

DAM

772871

774699

774667

757121

772871

757120

777136

772871

777140

772871

792295

792297

772871

792303

AUDIT

DAM

757118

747438

774699

774667

757121

757120

777136

792328

777140

792294

792295

792297

792303

- 87 BILLS OF SALE SORTED BY PARTNERSHIP

PARTNERSHIP: RCR4

ORIG.

TAG

AUDIT

TAG

ORIG.

REGIST

293A

294

294A

294BA

295

295A

296

296A

297

297A

298

298A

299A

301A

302

302B

303

303A

303B

304

304A

305A

306A

308

308A

308B

309

309B

310

310A

311

311B

312

312A

313B

314A

315A

316

317A

319

319A

319B

320

320A

321

321A

322

322A

323

293A

294

294A

294BA

295

295A

296

296A

297

297A

298

298A

299

299A

301

302

302B

303

303B

304

305

306

308

308A

308B

309

309B

310

310A

311

311B

312

312A

313

314

315

316

317

319

319A

319B

320

320A

321

321A

322

323

805310

805311

805312

805313

805314

805315

805316

805317

497883

497884

497855

805320

805321

805322

AUDIT

REGIST

805319

806227

806228

497857

805292

805293

497858

805295

805296

805297

805298

497888

805301

805302

805303

805304

497889

ORIG. AUDIT

BREED BREED

ORIG.

DOB

RAMB

RAME

RAMB

PAMB

RAMB

SUFK

RAMB

SUFK

RAMB

SUFK

RAMB

SUFK

RAMB

SUFK

RAMB

SUFK

RAMB

83/02/25

83/01/14

83/01/15

83/02/25

83/02/02

83/02/28

83/01/23

83/03/01

83/01/26

83/03/01

83/03/10

83/03/03

83/03/11

83/01/29

83/03/20

83/03/21

83/03/26

RAMB

SUFK

AUD.

DOB

83/02/25

83/01/14

83/01/15

83/02/25

83/01/15

83/02/25

83/02/28

83/01/23

83/03/01

83/01/26

83/03/01

83/03/10

83/03/11

83/01/29

83/03/20

83/03/21

83/01/31

83/03/26

ORIG.

SIRE

786553

737391

786553

786S53

786553

737391

786553

307047A

786553

737391

786553

737391

786553

403689A

737391

786553

403689A

737391

AUDIT

SIRE

786553

403,689A

786553

403,689A

786553

403,689A

786553

403,689A

786553

403,689A

786553

766553

786553

403,689A

786553

ORIG.

DAM

792303

772871

792308

792292

792304

792291

792305

772871

792302

792306

79230G

792306

772871

792299

772871

792307

792300

792298

403683A

772871

792311

472144A

772871

AUDIT

DAM

792303

792308

792292

792304

792291

472,145A

481,379A

792305

481,379A

792305

792302

792306

481,346A

792299

481,381A

792307

792300

792298

403,683A

792301

792311

472,144A

792312

- 88 BILLS OF SALE SORTED BY PARTNERSHIP

PARTNERSHIP: RCR4

ORIG.

TAG

AUDIT

TAG

ORIG.

REGIST

323A

324

324A

326

326A

328

328A

328B

329

329A

330

330A

333

333A

333B

335

335A

335B

336

336A

336B

337

337A

338

338A

339

339A

33A

33B

341

341A

343

343A

348

348A

348B

356

356A

3SGB

357

357A

358

361

361A

365

365A

367

367A

323A

324

324A

326

326A

328

328A

328B

329

329A

330

330A

333

333A

333B

335

335A

33SB

336

336A

336B

3 37

337A

338

338A

339

339A

33A

33B

341

341A

343

343A

348

348A

348B

356

356A

356B

357

3S7A

358

361

361A

365

366

367

367A

805304

324

497865

497867

497868

AUDIT

REGIST

497863

472145

403682

497890A 497890

497890A

497869

497870

497893

497871

497894

497872

403682

497873

497874

497875

49787602

497877

497902

497878

497905

497906

497879

ORIG. AUDIT

BREED BREED

ORIG.

DOB

RAMB

SUFK

83/03/26

83/01/31

83/02/01

80/12/21

81/03/18

79/01/02

79/01/00

83/02/01

83/02/02

79/01/02

83/02/07

83/02/08

83/02/09

SUFK 83/02/14

83/02/14

83/02/15

83/02/16

83/02/19

83/02/21

SUFK

AUD.

DOB

ORIG.

SIRE

737391

739670

403689A

737391

403689A

737391

403689A

737391

739670

495112

737391

83/02/14

737391

403689A

307047

403689A

737391

AUDIT

SIRE

ORIG.

DAM

AUDIT

DAM

772871

403,674A

772871

403,689A

772871

481,359A

772871

403,689A

772871

403,676A

772871

403,689A

772871

472,113A

772871

403,689A

747438

403,688A

390,788A

747438

390,796A

403,689A

481386A

481,386A

481386A

403,689A

772871

481,364A

772871

403,689A

772871

403,679A

772871

403,689A

481347A

481,347A

481347A

403,689A

772871

481,347A

772871

403,689A

403686A

403,686A

403686A

403,689A

772871

403,686A

772871

747438

403,689A

58553A

481,387A

58553A

403,689A

58553A

472,133A

58553A

403,689A

772871

472,135A

772871

737391

403,689A

772871

472,136A

737391

772871

737391

772871

403,689A

772871

472,136A

772871

403,689A

390798A

390,798A

403,689A _334452

481,388A

334452

403,689A

390793A

390,793A

403,689A

390793A

390,793A

403,689A

772871

472,117A

772871

403,689A

- 89 BILLS OF SALE SORTED BY PARTNERSHIP

PARTNERSHIP: RCR4

ORIG.

TAG

AUDIT

TAG

ORIG.

REGIST

369

369A

373A

373B

377

400

400A

401

401A

402

d02A

4J3

403A

403B

406

406A

406B

407

407A

407B

408

411

411C

412

412A

412C

413

413b

,114

414A

415

415A

415B

417

417B

419

419A

419B

420

420B

423

423A

423B

424

424B

425

425A

425B

426

369

369A

373

373B

377

400

401

401A

402

402A

403

403A

403B

406

406A

406B

407

407A

407B

408

411

411C

412

412A

412C

413

413B

414

414A

415

415B

417

417B

419

419A

419B

420

420B

423

423A

423B

424

424B

425

425A

425B

426

497880

814032

497882

564033

499324

AUDIT

REGIST

765457

564032

564037

499325

499326

499327

499329

499330

499331

499334

499335

499336

499337

465921

499338

499339

499340

499341

499351

499342

499343

499346

ORIG. AUDIT

BREED BREED

ORIG.

DOB

AUD.

DOB

ORIG.

SIRE

AUDIT

SIRE

ORIG.

DAM

AUDIT

DAM

SUFK

RAMB

SUFK

83/02/20

80/12/21

83/02/24

83/02/03

83/02/06

83/02/08

83/02/10

83/02/11

83/02/13

83/02/14

76/03/05

83/02/18

83/02/19

83/02/21

83/02/23

83/02/20

737391

498711A

462670A

737391

462670A

403,689A

772871

733817

N207045F

N304274F

328263A

328265A

328260A

299711A

323315A

324800A

328270A

340661A

299714A

323316A

-772871

772871

499713A

299713A

403, 681A

80/12/21

83/02/24

83/01/28

83/02/03

83/02/06

83/02/13

83/02/06

83/02/08

83/02/10

83/02/11

83/02/13

83/02/14

76/03/00

83/02/16

83/02/18

83/02/19

83/02/21

83/02/23

737391

403,689A

498,711A

462,670A

498,711A

462,670A

N78672M

462,670A

733817

368,190A

N207045F

N304274F

328,263A

N304269F

328,263A

328,265A

328,260A

299,711A

323,315A

324,800A

N168307F

328,270A

340,661A

299,714A

323,316A

299,713A

- 90 BILLS OF SALE SORTED BY PARTNERSHIP

PARTNERSHIP: RCR4

ORIG.

TAG

AUDIT

TAG

ORIG.

REGIST

426A

426B

427

427A

428

428A

429

429A

447

47A

47B

58R2

625M

625MA

625MB

629M

695A

721

721A

721B

7802

7802A

7802B

80142

80142A

805299

81-11A

81-146

82 100

82 100A

82 101

82 101A

82 102

82 102A

82 102B

82 105

82 105A

82 106

82 106A

82 119

82 119A

82 13

82 133

82 133A

82 134

82 134A

82 135

426A

426B

427

427A

428

428A

429

429A

447

47A

58R2

625M

625MA

625MB

629M

695

721

721A

721B

7802

7802A

7802B

80142

80142A

805299

81-11

81-146

82 100

82 100A

82 101

82 101A

82 102

82 102A

82 102B

82 105

82 105A

82 106

82 106A

62 119

82 119A

82 13

82 133

82 133A

82 134

82 134A

82 135

499343

499352

499344

499345

805174

416411

41G411

AUDIT

REGIST

820831

777131

403684

472153

777133

777135

492874

477181

477183

568192

388192

384596

388171

808282

805299

5830011A 810011

820010

820100

820101

820102

820105

820106

820119

820013

820133

820134

820135

ORIG. AUDIT

BREED BREED

ORIG.

DOB

SUFK

RAMB

SUFK RAMB

SUFK

SUFK RAMB

SUFK

RAMB

SUFK

R-AMB

SUFK

83/02/23

83/02/26

82/12/11

81/02/12

81/03/03

81/02/08

82/02/18

82/03/04

82/03/05

77/04/14

77/04/15

78/03/28

82/10/16

83/03/11

81/04/06

82/09/10

82/01/08

82/03/21

82/03/22

82/03/24

82/04/24

82/12/08

82/09/24

82/09/04

AUD.

DOB

83/02/23

83/02/26

83/10/13

81/02/12

79/01/00

81/03/25

92/01/00

81/02/08

82/02/18

82/03/04

82/03/05

77/04/00

78/03/28

81/02/28

82/01/08

82/03/22

82/03/24

82/04/24

82/12/08

82/09/04

ORIG.

SIRE

462670A

737391

462670A

693009

403689

737391

762553

478084A

462668A

468217A

338379A

343012

326006

762338

737391

403689

762553

403689

AUDIT

SIRE

462,670A

786553

737391

403,689A

862707

762553

478,084A

462,668A

468,217A

338,379A

343,012A

326,006A

737391

403689

762553

403689

ORIG.

DAM

299713A

772871

313022A

733817

38460B

384608

754548

754551

321439A

428332A

400954A

355378A

263774

323668

299714

772871

472166

539529

442949

442950

442953

403680

772875

521115

521374

AUDIT

DAM

299,713A

313,022A

777131

749170

384,608A

390,799A

857191

754551

321,439A

428,332A

400,954A

355,378A

263,774A

323,668A

772867

539S29

442950

442953

403680

772875

S21115

521115

521374

- 91 BILLS OF SALE SORTED BY PARTNERSHIP

PARTNERSHIP: RCR4

ORIG.

TAG

AUDIT

TAG

ORIG.

REGIST

82 135A

82 1358

82 136

82 136A

82 136B

82 139

82 13A

82 13B

82 14

82 140

82 140A

82 140B

82 146

82 146A

82 147

82 147A

82 147B

82 14A

82 150

82 150A

82 151

82 151A

82 152

82 152A

82 152B

82 153

82 153A

82 153B

82 154

82 154A

82 155

82 155A

82 156

82 156A

82 157

82 157A

82 157B

82 158

82 158A

82 159

82 159A

82 159B

82 173

82 173A

82 174

82 174A

82 175

82 175A

82 176

82 176A

82 135A

82 135B

82 136

82 136A

82 136B

82 139

82 13A

82 13B

82 14

82 140

82 140A

82 140B

82 14G

82 146A

82 147

82 147A

82 147B

82 14A

82 150

82 150A

82 151

82 151A

82 152

82 152A

82 152B

82 153

82 153A

82 153B

82 154

82 154A

82 155

82 155A

82 156

82 156A

82 157

82 157A

82 157B

82 158

82 158A

82 159

82 159A

82 159B

82 173

82 173A

82 174

82 174A

82 175

82 175A

82 176

82 176A

820135

820136

820139

820013

820014

820140

820146

820147

820014

820150

820151

820152

820153

820154

820155

820156

820157

820158

820159

820173

820174

820175

820176

AUDIT

REGIST

ORIG. AUDIT

BREED BREED

ORIG.

DOB

SUFK

RAMB

SUFK

RAMB

SUFK

82/09/04

82/09/08

82/12/08

82/03/19

82/09/08

82/09/10

82/03/19

82/09/13

82/09/17

82/10/OG

82/10/06

82/10/09

82/10/10

AUD.

DOB

82/09/04

82/09/08

82/03/19

82/09/08

82/09/10

82/09/13

82/09/14

82/09/17

82/10/06

82/10/09

82/10/10

ORIG.

SIRE

403689

762553

403689

762553

403689

AUDIT

SIRE

403689

762553

403689

ORIG.

DAM

521374

539528

7728?5

772875

772893

539528

472166

772893

472137

298939

299711

299712

299713

299714

306825

328270

340661

341122

AUDIT

DAM

521374

539528

772893

539528

472166

472137

298939

299711

299712

299713

299714

306825

328270

340661

341122

- 92 BILLS OF SALE SORTED BY PARTNERSHIP

PARTNERSHIP: RCR4

ORIG.

TAG

AUDIT

TAG

ORIG.

REGIST

82 177

82 177A

82 177B

82 178

82 178A

82 179

82 179A

82 180

82 180A

82 180B

82 182

82 182A

82 183

82 183A

82 183B

82 184

82 184A

82 185

82 185A

82 185B

82 186

82 186A

82 187

82 187A

82 188

82 188A

82 189

82 189A

82 19

82 190

82 190A

82 191

82 191A

82 192

82 192A

82 193

82 193A

82 194

82 194A

82 194B

82 195

82 195A

82 196

82 196A

82 197

82 197A

82 197B

82 198

82 198A

82 199

82 177

82 177A

82 177B

82 178

82 178A

82 179

82 179A

82 180

82 180A

82 180B

82 182

82 182A

82 183

82 183A

82 183B

82 184

82 184A

82 185

82 185A

82 185B

82 186

82 186A

82 187

82 187A

82 188

82 188A

82 189

82 189A

82 19

82 190

82 190A

82 191

82 191A

82 192

82 192A

82 193

82 193A

82 194

82 194A

82 194B

82 195

82 195A

82 196

82 196A

82 197

82 197A

82 197B

82 198

82 198A

82 199

820177

820178

820179

820180

820182

820183

820184

820185

820186

820187

820188

820189

820019

820190

820191

820192

820193

820194

820195

820196

820197

820198

820199

AUDIT

REGIST

ORIG. AUDIT

BREED BREED

ORIG.

DOB

AUD.

DOB

ORIG.

SIRE

AUDIT

SIRE

ORIG.

DAM

AUDIT

DAM

SUFK

RAMB

SUFK

82/10/13

82/10/14

82/10/15

82/10/18

82/10/19

82/10/21

82/03/16

82/10/24

82/10/27

82/10/26

82/10/28

82/10/29

82/10/13

403689

403G89

403689

762553

403689

341123

348710

368190

384596

384611

384613

390793

390798

772856

390799

390800

427209

427210

427211

427212

341123

82/10/13

82/10/14

82/10/15

82/10/18

82/10/19

82/10/21

82/03/16

82/10/24

82/10/27

82/10/26

82/10/28

82/10/29

403689

762553

403689

341123

348710

368190

384596

384611

384613

390793

390798

772856

390799

390800

427209

427210

427211

427212

- 93 BILLS OF SALE SORTED BY PARTNERSHIP

PARTNERSHIP: RCR4

ORIG.

TAG

AUDIT

TAG

ORIG.

REGIST

82 199A

82 19A

82 19B

82 19C

82 2

82 20

82 200

82 200A

82 201

82 201A

82 202

82 202A

82 202B

82 203

82 203A

82 204

82 204A

82 205

82 205A

82 206

82 206A

82 207

82 207A

82 208

82 208A

82 209

82 209A

82 20A

82 21

82 210

82 210A

82 211

82 211A

82 212

82 212A

82 212B

82 213

82 213A

82 214

82 214A

82 215

82 215A

82 216

82 216A

82 216B

82 217

82 217A

82 218

82 218A

82 219

82 199A

82 19

82 19B

82 19C

82 2

82 20

82 200

82 200A

82 201

82 201A

82 202

82 202A

82 202B

82 203

82 203A

82 204

82 204A

82 205

82 205A

82 206

82 206A

82 207

82 207A

82 208

82 208A

82 209

82 209A

82 20A

82 21

82 210

82 210A

82 211

82 211A

82 212

82 212A

82 212B

82 213

82 213A

82 214

82 214A

82 215

82 215A

82 216

82 216A

82 216B

82 217

82 217A

82 218

82 218A

82 219

820199

820019

820002

820020

820200

820201

820202

820203

820204

820205

820206

820207

820208

820209

820020

820021

820210

820211

820212

820213

820214

820215

820216

820217

820218

820219

AUDIT

REGIST

ORIG. AUDIT

BREED BREED

ORIG.

DOB

SUFK

RAMB

SUFK

RAMB

SUFK

82/10/29

82/03/16

82/04/10

82/03/16

82/10/29

82/11/06

82/11/08

82/11/10

82/03/16

82/03/26

82/11/10

82/11/11

82/11/17

82/11/18

82/11/20

82/11/24

AUD.

DOB

82/03/16

82/04/10

82/03/16

82/10/29

82/10/30

82/10/31

82/11/06

82/11/08

82/11/10

82/11/11

82/03/26

82/11/11

82/11/17

82/11/18

82/11/20

82/11/24

ORIG.

SIRE

403689

762553

737391

762553

403689

762553

403689

AUDIT

SIRE

762553

403689

762553

403689

ORIG.

DAM

427212

772856

772871

772856

427212

427213

427214

427215

427216

427217

442949

772856

772863

442949

442950

442952

442953

4429S3

442954

442955

44295S

AUDIT

DAM

772856

772871

772856

427212

427213

427214

427215

427216

427217

442949

772863

442949

442950

442952

442953

442954

442955

4429SS

44295S

- 94 BILLS OF SALE SORTED BY PARTNERSHIP

PARTNERSHIP: RCR4

ORIG.

TAG

AUDIT

TAG

ORIG.

REGIST

82 219A

82 21A

82 21B

82 22

82 220

82 220A

82 220B

82 221

82 221A

82 222

82 222A

82 222B

82 223

82 223A

82 224

82 224A

82 225

82 225A

82 226

82 226A

82 227

82 227A

82 228

82 228A

82 229

82 229A

82 22A

82 230

82 230A

82 230B

82 231

82 231A

82 232

82 232A

82 233

82 233A

82 234

82 234A

82 24

82 24A

82 24B

82 25

82 25A

82 25B

82 26

82 26A

82 26B

82 27

82 27A

82 27B

82 219A

82 21A

82 21B

82 22

82 220

82 220A

82 220B

82 221

82 221A

82 222

82 222A

82 222B

82 223

82 223A

82 224

82 224A

82 225

82 225A

82 226

82 226A

82 227

82 227A

82 228

82 228A

82 229

82 229A

82 22A

82 230

82 230A

82 230B

82 231

82 231A

82 232

82 232A

82 233

82 233A

82 234

82 234A

82 24

82 24A

82 24B

82 25

82 25A

82 25B

82 26

82 26A

82 26B

82 27

82 27A

82 27B

820219

820021

820022

820220

820221

820222

820223

820224

820225

820226

820227

820228

820229

820022

820230

820231

820232

820233

820234

820024

820025

820026

820027

AUDIT

REGIST

ORIG. AUDIT

BREED BREED

ORIG.

DOB

SUFK

RAMS

SUFK

RAMS

SUFK

RAMS

PAMB

RAMS

82/11/24

82/03/26

82/10/30

82/12/13

82/10/18

82/11/13

82/11/18

82/03/26

82/12/14

82/12/08

82/10/18

82/02/18

82/10/08

AUD.

DOB

82/03/26

82/10/30

82/12/13

82/10/18

82/12/15

82/11/13

82/11/18

82/12/14

82/12/08

82/10/18

82/02/18

82/10/08

ORIG.

SIRE

AUDIT

SIRE

ORIG.

DAM

403689

762553

403689

762553

403689

762553

737391

This text is long and has been trimmed here. Open the source document for the complete record.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.