Barry S. and Yvonne C. Hillman - Page 10




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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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Last modified: May 25, 2011