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their horses, respondent argues that they consist of only a
registration application, which shows the bloodline and physical
description of each horse. Citing Golanty v. Commissioner, 72
T.C. 411, 431 (1979), affd. without published opinion 647 F.2d
170 (9th Cir. 1981), respondent contends that such records are
the bare minimum needed to identify horses and are as consistent
with a hobby as with a business.
Petitioners contend that they included in the farm books
expenses that they thought might be deductible for tax purposes.
Petitioners argue that they completed the farm books and sent
them to their accountant, who decided what expenses were
deductible. Petitioners argue that, as to the records on their
horses, petitioners registered many of their Arabians with the
International Arabian Horse Association, which included blood
testing and freeze branding the horses.
In the instant case, we conclude that petitioners maintained
complete and accurate books and records. During each year in
issue, petitioners kept a farm book, which was published by the
Farm Credit Service. In each farm book, petitioners classified
expenses under various categories, e.g., "Labor Hired", "Feed
Purchased", "Breeding Fees and Veterinary Costs", and "Other
Expenses", and calculated an annual, and sometimes quarterly,
total for each category. Contrary to respondent's assertion,
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