Elizabeth Giles - Page 8

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          week.6  She has never decreased the 36 hours per week that she              
          has worked as a dentist to devote more time to the horse                    
          activity, and she has never increased the 30 hours per week that            
          she has devoted to the horse activity.  She acknowledges that the           
          raising of horses is a physical activity that will be more                  
          difficult for her to perform as she gets older.                             
               Petitioner did not maintain a separate bank account for the            
          horse activity, and she has never had business cards for the                
          horse activity.  Nor did she keep many records for the horse                
          activity.  The records which she kept for the horse activity                
          consisted primarily of minimal pedigree, registration, health,              
          breeding, and competition documents relating to some (but not               
          all) of the eight horses which were part of that activity.                  
          V.  Petitioner’s Horses                                                     
               A.  Overview                                                           
               Petitioner has throughout her life owned a total of eight              
          horses (the eight horses referenced above), one of which was                
          stillborn and another one of which died 9 months after birth.               
          The names of the seven horses which survived birth are Feyras               
          Raehele, Kart Blanche, Silent Reign, Borissa, VT Kartel, Bogaz,             
          and Censuous.  Following her sales of Silent Reign and Bogaz in             


               6 The record does not reveal how much of the 30 hours per              
          week for 1998 was attributable to time that petitioner spent with           
          a horse named Silent Reign.  As noted below, petitioner sold                
          Silent Reign on Dec. 31, 1997, but continued to keep it at the              
          Falling Water Way property.                                                 





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