Barry S. and Yvonne C. Hillman - Page 9




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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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