- 11 -
cannot remember any price they might have charged a customer or
client.
In sum, on the basis of all the facts and circumstances, we
hold that the record shows petitioners did not engage in their
horse-related activity with the actual and honest objective of
earning a profit. Nor have petitioners properly substantiated
any expenses, other than the farm lease expense, for any
activities which occurred, if at all, during 1993. We find that
petitioners' deductions for their horse-boarding activity are
limited to their reported gross income from the activity. See
sec. 183(b)(2).
II. Real Estate Taxes
Petitioners may not deduct real estate taxes for 1993.
Under section 164, a deduction is allowed for any State, local or
foreign real property tax. See sec. 164(a)(1). Receipts
produced by petitioners, however, in an attempt to substantiate
their deduction, clearly state that the taxes were paid on
March 17, 1997, not the year at issue. Respondent properly
disallowed this deduction.
III. Mortgage Interest
Petitioners may not deduct mortgage interest for 1993.
Qualified residence interest is deductible if paid during the
taxable year. See sec. 163(h)(2)(D). Petitioner produced no
documentation of interest paid. Petitioners rely solely on a
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 Next
Last modified: May 25, 2011