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Unless otherwise noted, all section references are to the
Internal Revenue Code in effect for the years in issue. All Rule
references are to the Tax Court Rules of Practice and Procedure.
All dollar amounts are rounded to the nearest dollar.
The issues for decision are: (1) Whether petitioners’
activity relating to the breeding and showing of horses was an
activity engaged in for profit. We hold that it was not. (2)
Whether petitioners are entitled to business mileage deductions
over and above the amounts respondent has allowed. We hold that
they are not. (3) Whether petitioners are liable for accuracy-
related penalties under section 6662(a). We hold that they are.
FINDINGS OF FACT
Some of the facts have been stipulated and are so found. We
incorporate by this reference the stipulation of facts and
attached exhibits.
At the time of filing the petition, petitioners resided in
Lewis Center, Ohio. Petitioners filed joint tax returns for the
years in issue, which were prepared by Barry Adelman, C.P.A.
Horse-Related Activities
Petitioners were married in 1969 and have two children, Todd
and Denise. Denise was born in 1974, and she has received
training in showing horses since 1982, when she was 8 years old.
During the years in issue, petitioners lived in a residence
situated on 8.5 acres, on which was also located a garage, seven-
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