Barry S. and Yvonne C. Hillman - Page 3

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          stall barn, riding arena for horses, pasture land, and an acre of            
          trail and woods.                                                             
               Petitioner Barry Hillman (Dr. Hillman) was 64 years old at              
          the time of trial and a medical doctor.  During the years at                 
          issue and continuing through the time of trial, Dr. Hillman                  
          operated a medical practice in Columbus, Ohio, as a sole                     
          practitioner with three employees.  Petitioner Yvonne Hillman has            
          assisted Dr. Hillman in his medical practice as an office worker             
          since 1969.  During the years in issue, Mrs. Hillman was Dr.                 
          Hillman’s office manager and kept the books for his medical                  
          practice.  She was paid $3,600 in annual wages during 1993 and               
          1994 for which she was issued Forms W-2.  Petitioners provided               
          Mr. Adelman with all original checks, deposit slips, and                     
          financial records for Dr. Hillman’s medical practice.  In 1993               
          and 1994, Dr. Hillman devoted between 45 and 50 hours per week to            
          the practice.                                                                
               On their 1991, 1992, 1993, 1994, 1995, and 1996 joint                   
          returns,1 petitioners reported the following income and expenses             
          from Dr. Hillman’s medical practice on Schedule C:                           

               1 Petitioners have reserved a relevancy objection with                  
          respect to post-1994 exhibits.  Sec. 1.183-2(a), Income Tax                  
          Regs., directs consideration of “all of the facts and                        
          circumstances” in determining whether an activity is engaged in              
          for profit, and evidence from years subsequent to the years in               
          issue is relevant to the extent it may create inferences                     
          regarding the existence of a profit motive in the earlier years.             
          See, e.g., Hoyle v. Commissioner, T.C. Memo. 1994-592; Smith v.              
          Commissioner, T.C. Memo. 1993-140.  We therefore overrule                    
          petitioners’ relevancy objection.                                            

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