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Trakehner horses. Around 1980, he sold Highspring Farm and began to board his
horses with a fee-for-service operation in Nashville, Ohio. The boarding
facility took care of feeding the horses, but Mr. Vitale continued to breed
them.
On March 1, 1982, Mr. Vitale, acting in his capacity as petitioner's
sole director, adopted a resolution authorizing petitioner to provide
"sponsorship and advertising funds" to underwrite the costs of Mr. Vitale's
equestrian activities. The resolution provided in relevant part:
WHEREAS, Highspring Farm's name is to be changed and its
activities are hereby transferred to Sussex Farm * * * in the
hope that horses would be produced as a result of Sussex Farm's
breeding operation which would achieve a national or world class
level of performance under the name or names of the
Corporation's products, such as Ice Free Nogarro, Ice Free
Nobella, and Ice Free Czest, highlighting MIDWEST INDUSTRIAL
SUPPLY, INC.'S winter line products under the trade names of Ice
Free Conveyor, Ice Free Switch, etc., which is on a par with the
finest products available,
* * * * * * *
IT IS HEREBY RESOLVED that in order for a corporate product
line to be able to acquire the prestige associated with
dressage, 3-Day, and show jumping and its current sponsors, the
Corporation is authorized to provide the funds to acquire and/or
breed horses in reasonable amounts necessary to support Sussex
Farm, and further, Robert W. Vitale, as President, is hereby
authorized to enter into contracts and leases and take other
actions on behalf of the Corporation, to obtain the necessary
facilities, horses, property, equipment and supplies to maintain
Sussex Farm.
Notwithstanding this 1982 resolution, petitioner did not begin to
sponsor Sussex Farm until 1986. In addition, the horses ultimately competed
under such names as Nogarro and Czropa rather than "under the name or names of
the Corporation's products".
During the 1986-89 period, Mr. Vitale's individual income tax returns
included Schedule F, "Profit or Loss From Farming", which reported the income
and expenses relating to his equestrian activities conducted under the name
"Sussex Farm". Sussex Farm was not a farm but simply the name that Mr. Vitale
used to conduct his equestrian activities.
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Last modified: May 25, 2011