Ella Freidus - Page 12

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          Petitioner knew that Mr. Freidus was using the checks to make                
          investments on her behalf.  Petitioner hoped that Mr. Freidus                
          would make good investments and earn profits.  Petitioner would              
          often discuss potential real estate investments with Mr. Freidus             
          or Burns.  If petitioner approved of a transaction, she signed               
          all the necessary documents.  Petitioner knew of Mr. Freidus'                
          investment in horses but usually left the investment decisions to            
          Mr. Freidus.  When Mr. Freidus would sell or lease a farm or a               
          horse as her agent, he discussed with petitioner the terms of the            
          documents that she signed.                                                   
               Petitioner owned 16 jumper horses during the years in issue.            
          Petitioner's annual gross earnings from horse sales are as                   
          follows: $375,000 for a horse named Nimmedor in 1988; $45,000 for            
          a horse named Urtola and $34,000 for a horse named Gold Falk in              
          1989; and $175,000 for a horse named Sebastian and $10,000 for a             
          horse named Le Val Blanc in 1990.  The purchaser of Nimmedor,                
          Donna Furth, paid the $375,000 sale price by wire transfer to an             
          Ivory Ranch account at Chase.  The proceeds from the remaining               
          horse sales were deposited into an account belonging to                      
          petitioner's broker and trainer, Margie Goldstein.  The net                  
          income or loss from petitioner's horse-related activities were as            
          follows: ($8,886), $216, $12,213, and ($17,171) for the taxable              
          years 1987, 1988, 1989, and 1990, respectively.                              

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