- 5 -
maintenance of Daisy in the amount of $7,714.07. Included in
this amount are the following expenditures:
Expenditures Explanation
$4,583.00 - stud fee; boarding and care for
Daisy; and boarding & care of Sassy
during pregnancy.
3,131.07 - costs to maintain horses, plus a
moving expense.
In February of 1990, petitioners sold Daisy for $1,400.
Daisy was sold at the approximate age of 22 months. A dressage
horse reaches its peak value between age 12 and 14, and only
after extensive training. Petitioners did not provide any
training to Daisy between her birth in 1988 and sale in 1990,
nor did they enter Daisy in any dressage competitions prior to
sale. Petitioner testified that personal, family matters
precluded her from spending the time with Daisy that would have
been necessary to train the horse for dressage riding.
OPINION
Petitioners claim that they incurred a loss on the sale of
Daisy and that, pursuant to section 165(c)(2), they are entitled
to deduct the loss as a long-term capital loss. In calculating
the amount of the long-term capital loss petitioners computed
their cost basis in Daisy by taking into account all of the
expenditures incurred in connection with Daisy's care.
Respondent offers a variety of reasons why petitioners are not
entitled to the deduction here in dispute.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 Next
Last modified: May 25, 2011