- 16 - Ashley’s difficulties or after her disposition. In sum, petitioners claimed a business plan focused on breeding, but in the 6 years they have engaged in this activity, they have not obtained a single foal or breeding fee. Other unbusinesslike conduct abounds. Petitioners did not allocate the costs of feed, bedding, and stable help between horses claimed as part of the show horse activity and those not claimed. Similarly, they treated all amounts paid to trainers as a business cost, although the testimony revealed that these trainers in part provided instruction to petitioners’ daughter regarding how to show horses. Dr. Hillman could not recall whether, and there is no evidence that, they issued Forms W-2 or 1099 to the show horse activity’s workers; by contrast, such formalities were observed in the conduct of Dr. Hillman’s medical practice. Likewise, petitioners’ accountant was provided the complete records of the medical practice; he received only year- end compilations with respect to the show horse activity. The evidence demonstrates that the records maintained by petitioners with respect to the activity were neither accurate nor complete. Their intermingling of the expenses allocable to nonbusiness horses and their daughter’s instruction with ostensible business expenses has already been noted. With a few exceptions, prize money was not recorded or reported. Petitioners claimed expenses for horse shows totaling $12,398 onPage: Previous 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Next
Last modified: May 25, 2011