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engaged in for profit" within the meaning of section 183.1
FINDINGS OF FACT2
Petitioners were married and filed a joint Federal income
tax return for the taxable year 1992. At the time the petition
was filed, they resided in Hockley, Texas.
Commencing in 1969, petitioners have been involved in
activities that include the breeding, care, showing, and
occasional sale of cutting horses (horse-related activities).
Cutting horses are quarter horses that are bred and trained to be
ridden into a herd of cattle to separate, or “cut”, one cow from
the rest of the herd. Historically, the use of cutting horses
was to remove a cow from a herd for individual handling, such as
for medical attention. However, performing this function has
become a sport, and cutting horse competitions are held
throughout the United States where prize money is awarded with
respect to horses that are judged best at "cutting". Horses with
records of superior performance at cutting horse competitions
appreciate substantially.
1 Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the year in issue, and
all Rule references are to the Tax Court Rules of Practice and
Procedure.
2 Some of the facts have been stipulated and are so found.
The stipulation of facts and attached exhibits are incorporated
herein by this reference.
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