Barry S. and Yvonne C. Hillman - Page 11

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          residence to his medical office was 12 miles one way.  Dr.                   
          Hillman estimated his business mileage by subtracting 24 miles on            
          4 days of each week (representing one round trip between his                 
          residence and medical office for each day he maintained office               
          hours) from the total change in miles on his odometer for the                
          year.  In this manner, Dr. Hillman estimated business mileage of             
          24,368 miles and 28,027 miles for 1993 and 1994, respectively,               
          which he provided to Mr. Adelman.  In respondent’s determination,            
          these mileage figures were reduced to 12,987 and 14,854,                     
          I.   Horse-Related Activities                                                
               The first issue to be resolved is whether petitioners’                  
          activities involving the breeding and showing of horses                      
          constituted an activity not engaged in for profit.2  As a general            
          rule, individuals are not allowed to deduct losses attributable              
          to an activity “not engaged in for profit”, except to the extent             

               2 The parties have treated all of petitioners’ horse-related            
          activities as a single activity for purposes of sec. 183, see                
          sec. 1.183-1(d)(1), Income Tax Regs., which we refer to as the               
          show horse activity, consistent with petitioners’ usage on their             

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Last modified: May 25, 2011