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foaling, and breaking. Petitioners have never shown any of
their horses in competitions and do not ride their horses
for recreation.
Petitioners advertised their horse-related operation
by placing a sign near a road which runs adjacent to their
property. This sign reads "Tennessee Walking Horses
boarded and stud [sic] and for sale". Petitioners also
periodically placed advertisements in local magazines and
newspapers when they desired to sell a foal or offer a
stallion for stud services.
Income and Losses
Petitioners reported a net loss from their horse-
related operation during each of the years in issue,
calculated as follows:
1986 1987 1988 1989 1990 1991
Income:
Sale of horses -- -- $75 $875 $250 $500
Boarding fees -- -- 1,200 1,000
Sale of alfalfa -- -- -- -- 2,599 --
Sale of hay -- -- -- -- -- 1,700
Sale of tractor -- -- -- -- 1,600 --
Unexplained income -- -- -- -- -- 70
Gross income -- -- 75 875 5,649 3,270
Expenses:
Breeding fees -- $(500) -- (234) -- --
Depreciation &
sec. 179 -- (1,308)(3,363) (3,321) (3,692)(3,203)
expenses
Feed purchased $(1,886)(5,019)(7,596) (3,153) (880) (1,083)
Fertilizers & lime -- -- -- -- -- (135)
Freight & trucking (50) -- -- -- -- --
Gasoline, fuel,
oil (280) -- -- -- -- --
Insurance -- -- -- (250) (250) --
Labor hired -- -- (2,300) -- -- (381)
Rent of farm,
pasture (990) -- -- (500) -- --
Repairs,
maintenance -- -- -- -- (923) (589)
Seeds, plants
purchased (120) -- (200) (1,681) -- --
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