- 22 -
also testified that in or around 1988, they began recording
receipts and expenditures related to the horse activity on
a calendar, and that they later began transferring these
records to a financial ledger. Petitioners further
testified that they maintained meticulous records of events
relating to their horses, such as births and inoculations,
throughout the years in issue. We find petitioners'
testimony credible in this regard.
We note that petitioners stopped purchasing thorough-
breds when they determined that they could not profit from
that undertaking. Petitioners also placed advertisements
in local newspapers and magazines when they desired to sell
a horse or offer a stallion for stud services.
2. Expertise of the Taxpayer or His Advisors
Petitioners were both raised on family farms, and both
had extensive experience in purchasing, breeding, training,
and selling horses. Petitioners also sought and followed
the advice of Mr. Adkins, an experienced breeder of
Tennessee Walking Horses, prior to the time they began
their horse breeding and boarding activity. Moreover,
petitioners learned to inoculate their horses and perform
other basic health care procedures themselves. Petitioners
also joined the Tennessee Walking Horse Breeders Associa-
tion and educated themselves on bloodlines and markets for
Page: Previous 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 NextLast modified: May 25, 2011