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Jordan and Mr. Brockenbrough testified that Mr.
Brockenbrough consulted with Jordan about horse breeding and
training, rodeos, and fairs. Respondent contends that Jordan had
no experience with the horse business or fairs. We disagree.
Jordan had raised horses, and had prepared several tax returns
for people who participate in the Cotton Picking Fair. Jordan
also had been associated with the Cotton Picking Fair for 25
years.
Respondent points out that there is no evidence that
Bumgarner had operated a horse operation for profit. However,
Bumgarner had a good reputation as a trainer and rodeo operator.
There is no indication that petitioners should have known that
Bumgarner would misuse their property. Respondent also contends
that Bumgarner's low salary shows that he was not qualified. We
disagree. Cashion testified that a manager such as Bumgarner
would typically be paid a salary such as petitioners paid plus a
percentage of income earned in the activity.
This factor favors petitioners.
3. Taxpayer's Time and Effort
Mr. Brockenbrough spent a lot of time and effort in the
horse and rodeo activity. He did bookkeeping, horse
registration, and manual labor such as putting up hay and
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