James L. Sullivan and Dorothy B. Sullivan - Page 22

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          for the horses,7 such as cleaning stables, as well as her arduous           
          schedule of attending horse shows most weekends, was too                    
          unpleasant to constitute a hobby.                                           
               With respect to Mrs. Sullivan's schedule of weekend horse              
          shows, records have only been provided for 1992.  A portion of              
          Mrs. Sullivan's attendance at shows that year was for the purpose           
          of competing on Miss Doc Chic, a horse in which petitioners did             
          not retain any possibility of profit.  Their prize stallion                 
          Colonel Rey Lew, on which their argument of profit motivation is            
          staked, was being ridden in competition by someone else in 1992.            
               Nevertheless, even if we accept that Mrs. Sullivan traveled            
          to an extensive number of weekend horse shows that year and                 
          provided the manual labor required to care for the horses kept on           
          petitioners' premises, we have some difficulty with petitioners'            
          argument that Mrs. Sullivan's time and effort were too extensive            
          to be other than profit-oriented.  The regulations effectively              
          provide that time and effort are somewhat discounted as a factor            
          when the activity has substantial recreational aspects.  Keeping            


               7 Petitioners exaggerate somewhat the labor expended by Mrs.           
          Sullivan.  While petitioners on brief repeatedly invite us to               
          contemplate the rigors of cleaning stables, etc., for seven, or             
          seven to nine, horses, the record demonstrates that in 1992,                
          petitioners owned six horses, two of which were kept at Mr.                 
          Hightower's farm.  The record further reveals that an individual            
          was compensated during 1992 to exercise at various times two of             
          the four horses kept on petitioners' premises.  Nonetheless, we             
          accept that Mrs. Sullivan provided significant manual labor in              
          caring for the horses kept on petitioners' premises.                        




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