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Cincinnati from Sunday night to Thursday night each week. In
West Liberty, Mr. Dodge practiced law and operated a tax
preparation business at various times during 1991, 1992, and
1993. During 1992 and 1993, Mr. Dodge worked between 12-20 hours
per week in his law practice. Mr. Dodge has prepared income tax
returns for and assisted farmers with their accounting and tax
returns for more than 20 years.
Vivian Dodge (Mrs. Dodge) operated an accounting office and
services business called "Dodge & Hostetler" in which she was a
50-percent general partner. Mrs. Dodge was engaged full time at
Dodge & Hostetler during the years at issue. Petitioners also
owned and managed three rental properties located in West Liberty
during the years at issue. Petitioners' combined gross income,
without considering the losses claimed for the horse-breeding
activity, was $85,216, $88,391, and $103,659 for the taxable
years 1991, 1992, and 1993, respectively.
In 1981 petitioners became interested in starting a horse
farm. On August 17, 1981, Mr. Dodge met with James Tischer (Mr.
Tischer), a tax specialist, to discuss the deductibility of
expenses as losses for tax purposes of their planned horse farm.
Mr. Tischer suggested that petitioners maintain separate books
and records, and that petitioners prepare a long-term plan for
the horse farm.
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Last modified: May 25, 2011