- 15 -
G. Petitioners' Income Tax Returns and Respondent's
Determination
Petitioners reported the following on their joint tax
returns for tax years 1979 to 1990:
Interest, Net loss
dividend, from
IRA, Horse Total horse
Year Wages pension income Expenses Depreciationexpense activity
1979 $78,260 $658 0 $1,952 $284 $2,236 $2,236
1980 87,642 845 2,620 13,133 1,290 14,423 11,803
1981 95,049 7,553 4,871 24,878 3,468 28,346 23,475
1982 111,513 4,855 4,000 78,522 5,300 83,822 79,822
1983 136,807 2,275 7,107 61,660 6,628 68,288 61,181
1984 144,881 1,269 1,450 76,647 9,110 85,757 84,307
1985 162,519 1,072 7,133 64,589 18,883 83,472 76,339
1986 159,971 1,300 4,320 76,131 15,357 91,488 87,168
1987 178,850 1,802 1,937 46,432 11,419 57,851 55,914
1988 179,162 1,960 500 63,255 9,426 72,681 72,181
1989 74,775 150,002 12,400 75,458 7,161 82,619 70,219
1990 937 133,838 14,500 74,410 3,945 78,355 63,855
1,410,366 307,429 60,838 657,067 92,271 749,338 688,500
In the notice of deficiency, respondent disallowed losses
for 1988, 1989, and 1990 for petitioner's horse activity on the
grounds that petitioner did not conduct the activity for profit.1
1 Each party offered evidence of events involving petitioner
which occurred after the years in issue. Each party objected to
the other's evidence from years after 1990, the last year in
issue. We did not consider evidence of events which occurred
after 1990 because it did not show whether petitioner had a
profit objective during the years in issue. See Estate of
Brockenbrough v. Commissioner, T.C. Memo. 1998-454; Gustafson's
Dairy, Inc. v. Commissioner, T.C. Memo. 1997-519; Choate Constr.
Co. v. Commissioner, T.C. Memo. 1997-495; cf. Estate of
Hutchinson v. Commissioner, T.C. Memo. 1984-55 (events after the
date in issue are relevant only if they shed light on the
taxpayer's state of mind on the date in issue), affd. 765 F.2d
665 (7th Cir. 1985).
Page: Previous 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 NextLast modified: May 25, 2011