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Petitioners maintained a separate bank account for all of
their horse-related expenditures. Dr. Hillman kept all bills and
invoices related to the show horse activity in an envelope and
would transfer the information every 2 to 4 weeks to a ledger
kept for this purpose. In 1993, Dr. Hillman spent no more than 3
hours per month on bookkeeping and management duties with respect
to his show horse activity.
Petitioners’ accountant, Mr. Adelman, did not have access to
any records for petitioners’ show horse activity. Dr. Hillman
instead provided Mr. Adelman with a yearend compilation of income
and expense figures for the activity for inclusion on their tax
returns.
Petitioners did not prepare or maintain a written business
plan regarding their show horse activity. Dr. Hillman discussed
petitioners’ show horse activity with their accountant, but these
discussions focused on the tax aspects of the activity.
Mileage Deduction
Respondent reduced petitioners’ allowable deductions for
business mileage that Dr. Hillman claimed with respect to his
medical practice from $6,823 to $3,636 for the 1993 taxable year
and from $8,128 to $4,308 for the 1994 taxable year.
Dr. Hillman maintained office hours 4 to 5 days a week,
performed surgery at five hospitals 4 to 5 days per week, and
made hospital rounds 5 to 6 days per week. The distance from his
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