- 15 -
which they attempted to use to reduce their tax liability for
those years.5
Petitioners contend that they expected the Haughton property
and all of the horses, equipment, saddles, pipe, and tack to
appreciate in value. Turning first to the Haughton property,
petitioners claim on brief that they paid $60,000 for that
property, although the record establishes only that they offered
to buy that property for $60,000. According to Mr Haun's testi-
mony, the fair market value of the Haughton property at the time
of trial in March 1998 was approximately $150,000. On the
4(...continued)
in their returns for 1991 through 1996:
Year Wage Income
1991 $71,659
1992 72,345
1993 84,565
1994 84,167
1995 99,366
1996 107,030
Total 519,132
5 The following income, expenses, and losses from the
roping horse activity were reported in petitioners' returns for
the years 1991 through 1994 and in Rafter H's returns for the
years 1995 and 1996:
Year Income Expenses Losses
1991 -0- $19,915 $19,915
1992 $600 35,108 34,508
1993 1,000 45,344 44,344
1994 -0- 29,712 29,712
1995 901 26,949 26,048
1996 -0- 24,705 24,705
Totals 2,501 181,733 179,232
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