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the sole issue for decision is whether petitioner's horse
breeding activity was an activity not engaged in for profit.
FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
The stipulation of facts and the attached exhibits are
incorporated herein by this reference. Petitioner resided in
Campbell, Texas, at the time he filed his petition.
Petitioner has been an airline pilot with American Airlines
for more than 32 years. During 1992 and 1993, petitioner was on
reserve status. During this time, he worked an average of 5 days
a month, but he was available to work 20 days a month. In 1992
and 1993, petitioner earned wages of $169,858 and $166,040,
respectivelyPetitioner has been involved with horses since
childhood. He owned his first cutting horse2 when he was 7 years
old and first trained a cutting horse when he was a teenager.
Starting in 1979, petitioner decided to breed, train, and
sell quarter horses for cutting horse competitions (the horse
1(...continued)
charitable contributions in the amounts of $5,200 and $4,800 for
1992 and 1993, respectively. Respondent concedes that petitioner
is entitled to deduct home mortgage interest expenses in the
amounts of $20,376 and $19,882 for 1992 and 1993, respectively,
and an unreimbursed employee expense in the amount of $1,216 for
1993.
2 Horses (generally quarter horses) are bred and trained as
cutting horses for competitions in which the horse must separate
one cow from the herd. Horses are bred with "cutting" bloodlines
which give them the natural ability to be competitive. The
raising and training of a foal for cutting horse competition
takes approximately 4 years.
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