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know the amount of their horses’ winnings at any of the shows.
When petitioners’ horses were shown in a professional event, the
trainer who showed the horses would normally subtract the prize
money earned from the training bill. The total “known” expenses
for horse shows during the period 1991 through 1996 totaled
$8,451. Expenses for horse shows claimed on petitioners’ returns
for this period totaled $12,398.
From 1991 through 1994, Denise spent 5 to 6 hours every
other day grooming and exercising the horses that petitioners
included in their show horse activity. She was not compensated
for her services. Denise showed petitioners’ horses as an
amateur. Prize money was generally not awarded to amateurs in
the shows in which Denise participated; when awarded, it ranged
between $15 and $25.
Petitioners used college students as stable help. The
stable help would muck out the stalls and feed and care for the
horses. Petitioners paid some of the stable help, while others
worked in exchange for riding privileges. Dr. Hillman did not
know whether Forms 1099 or W-2 were issued to any of the stable
help.
Petitioners used six different trainers between 1991 and
1996, who worked with both Denise and the horses. These trainers
were hired to train the horses and to provide instruction to
Denise regarding how to show horses in competition.
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Last modified: May 25, 2011