- 39 -
a factor indicating that the activity was not engaged in for
profit. Faulconer v. Commissioner, 748 F.2d 890, 900-901 (4th
Cir. 1984); sec. 1.183-2(b)(6), Income Tax Regs.
We note initially that, when petitioner decided to acquire
Moonshadow in 1988, he was aware that the activities of dressage,
jumping, and/or cross-country riding would expose that (and any
other) horse to a significant risk of injury. Thus, any losses
sustained as a result of injuries to his horses should not have
been unforeseen by petitioner.
As for petitioner's contention that Moonshadow's lameness
during 1990 was responsible for the losses that he reported for
the years at issue and thereafter, petitioner claims that he was
about to offer Moonshadow for sale at the time it became lame and
that it had a value of about $25,000 at that time. The record
does not contain any reliable evidence showing (1) the value of
Moonshadow at the time it became lame, (2) the attempts, if any,
that petitioner made, or planned to make, to sell Moonshadow, or
(3) the profit that would have been generated from such a sale
taking into account the price that petitioner paid for Moonshadow
in 1988 and the expenses that he incurred from then until 1990
when Moonshadow became lame.30
With respect to petitioner's claims about the injuries to
Lilly and Zack's foot disease that occurred around 1995, we fail
30 It is also noteworthy that although Moonshadow became lame in
1990, petitioner kept that horse and continued to incur expenses
with respect to it until he donated it to VPI around 1995.
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