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ownership of those assets to the corporation.13 On its 1991 Form
1120S, Blue Ribbon also reported a section 1231 loss on the
destruction of Mr. Abbene's horse, Magic Moment, in the amount of
$2,880.
Petitioners reported combined gross income of $134,629 for
1990, $112,136 for 1991, and $110,245 for 1992. Petitioners
claimed losses in the amounts of $58,809, $57,799, and $61,017
for 1990, 1991, and 1992, respectively, as Mr. Abbene's
distributive share of Blue Ribbon's operating losses.14 For
1991, petitioners also claimed $2,880, as Mr. Abbene's
distributive share of the section 1231 loss Blue Ribbon claimed
on the destruction of Magic Moment.
13 Mr. Abbene indicated at trial that Blue Ribbon did not own
the assets used in its operations and for which it claimed
depreciation deductions during the years in issue. Accordingly,
at the close of trial, respondent made an oral motion pursuant to
Rule 41(b) to amend the pleadings to conform to the evidence in
order to assert, in the alternative, that petitioners are not
entitled to claim losses in connection with the operation of Blue
Ribbon to the extent that such losses represent depreciation
deductions. We denied respondent's motion on the grounds that
the depreciation issue was not tried by either express or implied
consent of the parties. Rule 41(b). Consequently, the issue of
whether Blue Ribbon was entitled to depreciation deductions in
connection with the assets owned by Mr. Abbene, but used in its
operations, is not properly before the Court, and is not
considered in this opinion.
14 Petitioners claimed a loss from the operation of Blue Ribbon
in the amount of $62,638 for 1993. Petitioners claimed no losses
from the operation of Blue Ribbon for 1994, 1995, or 1996. While
the record discloses a loss of $59,714 for 1994, there is no
evidence of the amount of income or loss from the operation of
Blue Ribbon for 1995 or 1996.
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