- 36 -
In Schedules F of his returns for 1988 and 1989, petitioner
reported no income and losses of $3,648 and $10,253, respec-
tively, from his horse activity. In Schedules F of his returns
for 1990 and 1991, petitioner reported aggregate income of $0 and
$1,024, respectively, from both his horse and cattle activities
and aggregate losses of $7,780 and $19,588, respectively, from
both of those activities.26 The aggregate losses that petitioner
reported in Schedules F of his returns for 1992 and 1994 from
those activities were $28,691 and $37,478, respectively. The
aggregate loss from those activities that he reported in Schedule
F of his 1993 return decreased from the prior year to $11,053,
presumably because of an unexplained $60,000 income item and an
unexplained $29,202 interest expense item for that year.
Petitioner had sufficient income during the years at issue
from various sources so as to enable him to maintain a comfort-
able standard of living, notwithstanding the losses from his
horse activity that he was able to use to reduce his tax liabil-
26 Although petitioner did not show separately the respective
income, expenses, and losses associated with his horse activity
and his cattle activity for 1990 through 1994, the record herein
otherwise establishes (1) that the income reflected in Schedules
F of petitioner's returns for 1991 through 1994 was solely from
his cattle activity except for an unexplained $60,000 income item
for 1993 and (2) that petitioner had expenses relating to his
cattle activity during 1991 in the amount of $1,024. Moreover,
based on the characterization of certain expenses that petitioner
claimed in Schedules F of his 1990, 1992, 1993, and 1994 returns,
it appears that at least $1,428, $17,623, $18,561, and $17,845,
respectively, of the aggregate expenses claimed therein related
to his horse activity.
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