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Petitioners’ show horse activity lost substantial sums every
year for 6 years, aggregating at nearly $100,000. Apart from
their somewhat vague business plan to “not start out large”,
petitioners have not claimed any specific startup period wherein
losses are customary. Petitioners do assert that they
experienced unforeseen adverse circumstances in the poor health
and foaling difficulties encountered with Ashley. While Ashley’s
problems may not have been foreseeable, we think they fall well
short of accounting for petitioners’ losses. Ashley was acquired
as a 2-year-old in 1984 and was old enough for breeding in 1986.
Dr. Hillman testified that the horse miscarried three times in 4
years. But petitioners owned her for 10 years; they claimed her
as part of their show horse activity in only 1 year. If
petitioners had been engaged in a profit-seeking breeding
activity, we believe they would have acted more promptly to
address the problem of a nonperforming brood mare. Moreover,
there is no evidence that they have acquired a brood mare during
2 years subsequent to the years in issue. We are left both with
the impression that the record does not contain a full accounting
of petitioners’ experience with Ashley, and the conviction that
any losses occasioned by Ashley’s unforeseen problems do not
satisfactorily explain the history of losses in this case.
Petitioners’ failure since 1994 either to acquire a new brood
mare or to obtain any breeding fees from their stallions, and
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