Barry S. and Yvonne C. Hillman - Page 7




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          competitions.  Petitioners did not receive any cash or property              
          with respect to this arrangement.                                            
               Petitioners purchased Ben Hur, a stallion, in 1992 for                  
          $12,000.  Morgan stallions generally begin to breed at about 4               
          years of age and can breed until approximately 28 years of age.              
          Ben Hur has not produced offspring since petitioners purchased               
          him, although he did produce offspring prior to their ownership.             
          Petitioners claimed Ben Hur as part of their show horse activity             
          in 1992, 1993, 1994, 1995, and 1996.  Ben Hur participated in the            
          following horse shows:                                                       
               Name or                        Prize money                              
               location           Years          earned         Expenses               
               Gold Cup       1992/1994/1995       Unknown        $862                 
               River Ridge    1992/1994/1995       Unknown        792                  
               Twin Rivers    1995                 $35            525                  
               Buckeye        1992/1994/1995       75             615                  
               Ohio State Fair1994                 Unknown        266                  
               KYOVA          1994                 Unknown   Unknown                   
               Blue Ribbon Classic   1994/1995     Unknown        350                  
               Delaware Cty Fair1994                 Unknown        182                  
               Penn-Ohio      1992                   15            408                 
               Totals                              125            4,000                

               Petitioners purchased Chicardo, a 3-year-old stallion, in               
          1985 for $1,500.  Petitioners gelded Chicardo in 1991 or 1992                
          because they decided that he was not good enough to hold for                 
          breeding.  Petitioners claimed Chicardo as part of their show                
          horse activity for 1994 and 1995.  Chicardo did not participate              
          in horse shows after 1990.  Chicardo was ridden partly for                   
          pleasure because he was not as valuable as Ben Hur or                        
          Riskybiznis, and petitioners were planning to sell him as an                 





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