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Year Deficiency Sec. 6662
1991 $11,543 $2,165
1992 12,634 2,311
1993 12,387 2,489
After concessions,2 the following issues remain for our
consideration: (1) Whether petitioners' horse-breeding activity
during the taxable years 1991, 1992, and 1993 was engaged in for
profit; and (2) whether any underpayment of tax is due to either
negligence or intentional disregard of rules or regulations, or a
substantial understatement of income tax.
FINDINGS OF FACT3
At all times relevant to this case petitioners were husband
and wife and resided in West Liberty, Ohio. They filed joint
Federal income tax returns for all 3 years at issue.
James Dodge (Mr. Dodge) was an attorney and president of
Brad Bern Corp. located in Cincinnati, Ohio, during the years at
issue. From 1990 through 1993, Mr. Dodge was very active at Brad
Bern Corp., working on average 12 hours a day, 4 days a week for
the corporation. He lived at petitioners' second home in
2Respondent disallowed unsubstantiated interest deductions
of $5,099 and $7,713 in 1991 and 1992, respectively. In
addition, respondent determined that petitioners understated
interest income in the amount of $66 in 1991. Since petitioners
failed to address either of these issues in their brief, we treat
this as a concession by petitioners and find for respondent.
Theodore v. Commissioner, 38 T.C. 1011, 1041 (1962).
3The stipulation of facts and the attached exhibits are
incorporated by this reference.
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