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ensure that the various expenses charged to petitioner by the
tracks, such as jockey fees and photograph fees, were correct.
Kuta kept copies of (a) invoices from petitioner's trainers
and from farms where his horses were stabled, and (b) statements
from racetracks at which his horses raced showing the race dates,
his horses’ standing in those races, and the total amounts that
his horses won. Kuta did not regularly prepare records showing
how much each horse earned. In a few of the years before the
years in issue, Kuta prepared a summary at the end of the year
showing the earnings of each horse.
From 1959 to 1989, Kuta prepared spreadsheets which showed
expenses of the horse racing and breeding activity by category.
Kuta usually prepared the spreadsheets from the checkbook for the
activity at the end of the year. In some years she listed
disbursements chronologically; in other years she listed them by
payee. The disbursement spreadsheets did not segregate expenses
by horse. Kuta used the spreadsheets to know where money was
being spent and to give to the accountant to prepare petitioner's
tax returns.
From 1990 to the time of trial, Kuta prepared the
spreadsheets on a personal computer. Kuta could not use the
computer to generate a report that showed petitioner's expenses
for each horse. The spreadsheets did not include information
about receipts.
Kuta prepared index cards on most of petitioner's horses
from around 1956 through the time of the trial which showed the
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