- 17 -
Income Tax Regs. Petitioners maintain that the manner in which
they conducted their horse-related activities was substantially
similar to that of two other breeders, Mr. Hightower and Mr.
Wilson, each of whom has earned a living from horse operations
for approximately 40 years. We reject the contention that
petitioners' activities are comparable, however. The activities
of Mr. Hightower and Mr. Wilson were more extensive than
petitioners'. Petitioners owned six horses, a six-horse barn,
and 10 acres of pasture in 1992. They produced evidence with
respect to the breeding of only one horse, and in 1992 that horse
was bred only three times. Mr. Wilson had three stallions and
250 acres and anticipated breeding approximately 250 mares in the
year of trial. Mr. Hightower generally kept 20 to 22 horses.
Petitioners also conceded they did not enter horses in
competitions as extensively as Mr. Hightower and Mr. Wilson did,
even though all testimony in the case indicated that extensive
nationwide competition was an important means of proving a
horse's value. Perhaps the most critical difference is that both
Mr. Wilson and Mr. Hightower earned income in their operations by
training other people's horses. Petitioners not only did not
train others' horses, they paid for training, in significant
amounts so far as the record reveals.6 In 1992, petitioners paid
6 The only year for which any break-out of petitioners'
training expenses is available is 1992.
Page: Previous 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 NextLast modified: May 25, 2011