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vendors. Because of their success in the fall of 1992,
petitioners decided to hold their own fair, called the Great Gay,
Georgia, Marketplace, twice a year, when the Cotton Picking Fair
is held.
E. Petitioners' Tax Returns
Petitioners reported the following gross receipts, losses,
and depreciation for 1991 and 1992:
Gross Losses (including
Year receipts depreciation) Depreciation
Antiques
1991 $1,885 ($10,952) $2,594
1992 2,589 (9,830) 2,443
Horses and Rodeos
1991 3,947 (40,746) 4,426
1992 21,589 (44,600) 8,146
Petitioners reported their horse and rodeo undertakings on
the same schedule in 1991 and 1992. Petitioners had gross
receipts from their fair in 1992 of about $3,020 with no expenses
or depreciation.
II. OPINION
Respondent concedes that petitioners operated the rodeos for
profit. We must decide whether petitioners operated their
antique store for profit in 1991 and 1992. We must also decide
whether petitioners' horse and rodeo undertakings were one
activity, and if so, whether they operated that activity for
profit in 1991 and 1992. Finally, we must decide whether
petitioners are liable for the accuracy-related penalty for
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