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enable the taxpayer to make informed business decisions. Burger
v. Commissioner, 809 F.2d 355, 359 (7th Cir. 1987), affg. T.C.
Memo. 1985-523; Ballich v. Commissioner, supra.
At trial, Mr. Dodge admitted that there were no records kept
that would show the expenditures made with respect to each
individual horse. Without such knowledge, petitioners would have
no way of knowing which of their broodmares was producing more
profitable foals or which training regimen was successful at
increasing the value of the horses. In addition, petitioners did
not even separate the expenses incurred from the horse-breeding
activity from the expenses incurred from raising steers. The
lack of any detailed records as to which activity on the horse
farm was profitable is an indication that the horse-breeding
activity was not carried on for profit. Ballich v. Commissioner,
supra. Apparently, petitioners retained what they thought were
the minimum records necessary to prepare their tax returns.
Petitioners did not advertise their operation or the
availability of their horses in trade magazines, journals, or
other publications. Petitioners argue that they advertised their
horses by exhibiting them in horse shows. While we recognize
that horse shows may be one method for advertising horses for
sale, petitioners' failure to attempt to reach a larger customer
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