- 9 - Petitioners were very serious about their horse activities and operated them in a businesslike manner. Petitioners maintained extensive records and kept complete accounts of their expenses from their horse activities for the years in issue. Bonde, petitioners' horse trainer, testified that petitioner checked every piece of paperwork involved with his horses, including medical charts and veterinarian bills. Bonde further testified that petitioner expects a great deal from a trainer, including providing a leading rider to ride his horses. In addition, petitioners had a business plan, which was to earn money by breeding top horses to run in superior races. This plan was evidenced by petitioner's actions and attempted changes to improve profitability. Petitioner consulted with knowledgeable individuals about horse breeding and began to "breed up" by upgrading his brood mares and the stallions with which they were bred. This plan has produced foals which have been performing better at the racetrack. Based on the facts of this case, we find that petitioners conducted their horse activities in a businesslike manner, and this indicates a profit motive. Sec. 1.183-2(b)(1), Income Tax Regs. A taxpayer's expertise, research, and study of an activity, as well as his consultation with experts, may be indicative of a profit motive. Sec. 1.183-2(b)(2), Income Tax Regs. Petitioners consulted Bonde as the trainer of their racehorses. Bonde has been training horses for 25 years, at the time of trial had approximately 30 clients, and trains between 20 and 50 horses at one time. Adams, thePage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 Next
Last modified: May 25, 2011