James D. Schlicher - Page 17

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          trial, Mr. Vogel, who had been to the Clayton property more than            
          a half of a dozen times, testified that he never saw any horses             
          on the upper, steeply hilled portion of the Clayton property.               
               Petitioner testified that he does not train horses on his              
          premises, nor does he give riding lessons or offer horseback                
          riding facilities.  Access to the riding trails from the Clayton            
          property is obstructed by the presence of Mount Diablo; therefore           
          a boarding client who wants to train, ride, or exercise his or              
          her horse must transport the animal to another facility in the              
          area.  Furthermore, because petitioner uses the business portion            
          of the Clayton premises solely for breeding and boarding horses             
          he needs less land for such business, than, for example, someone            
          who operates a horse training and horseback riding facility.                
               Finally, we mention in passing that the good faith of a                
          taxpayer is taken into account in determining whether or not                
          property is used by a taxpayer as his residence.  Thomas v.                 
          Commissioner, 92 T.C. 206, 243 (1989); sec. 1.1034-1(c)(3)(i),              
          Income Tax Regs.  In assessing petitioner's credibility we note             
          that we were influenced by the testimony of  Mr. Vogel, the                 
          revenue agent who was called as witness for respondent.  At trial           
          Mr. Vogel testified that petitioner's girlfriend and bookkeeper,            
          Patsy Lyons, spent a substantial amount of time with him                    
          reconstructing petitioner's records.  Moreover, the agent                   
          testified that both she and the petitioner were very cooperative            
          and that he had "complete faith that what she was telling * * *             

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