- 4 -
Petitioner did not use any of the Livermore property for business
purposes. In 1988, petitioner received gross receipts from his
horse boarding and breeding business of $28,188,4 and paid
deductible business expenses of $47,752. Petitioner owned some
personal horses that he rode for pleasure, which he kept on the 5
acres used as his Livermore residence. Petitioner had a fence
around the 5 acres, corrals that were used to exercise his
personal horses, and a barn used for boarding. Petitioner did
not allow any of the boarded horses in the area where he kept his
personal horses.
On July 18, 1988, petitioner sold the Livermore residence
and the 5 adjoining acres for $550,000. He incurred $29,000 in
sale expenses. Thus, the adjusted sales price was $521,000, and
petitioner's total adjusted basis was $102,000. Therefore,
petitioner realized a gain from the sale of $419,000.
In December of 1988, petitioner purchased 51 acres of
undeveloped land in Clayton, California (the Clayton Property),
for $380,000. The property is comprised of an upper, steeply-
hilled wooded area and a plain. The upper portion of the
property, which is zoned for residential building has a better
view of the surrounding countryside and of Mount Diablo than does
the plain. The plain, where petitioner's boarding facility is
located, consists of a 100-year flood zone. This area is also a
Native American archaeological site; therefore, petitioner is
4 Petitioner's gross receipts from this activity are referred
to in the notice of deficiency as "Schedule F gross receipts."
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Next
Last modified: May 25, 2011