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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 on
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