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was able to sell several of the foals, one to a person from New
York.
In 1981, petitioner decided to expand her horse breeding
activity from a hobby to a business and began claiming tax
deductions for her expenses. This decision was a result of
conversations that she had with prominent members of the National
Appaloosa Horse Club, which acts as the official registry for
Appaloosas. Petitioner thereafter began breeding more than one
broodmare simultaneously. She also became very active in the
Appaloosa Horse Club of Oregon. She has served as its secretary
and has organized and served as a judge at Appaloosa shows.
Petitioner has become knowledgeable in the different
pedigrees and breeding lines of Appaloosas by consulting with
other individuals in the business of breeding and training
Appaloosas. Her business plan focuses on breeding Appaloosas in
the $5,000 to $15,000 price range for sale to young riders and
nonprofessional adult riders. Petitioner believes that her
target market is broader than the market for horses in the
$30,000 to $50,000 price range and will allow her to make a
profit by reason of a greater number of sales. At the same time,
she believes that her target market is more profitable than the
market for less expensive horses because the profit margin for
lower quality horses is minimal. She therefore seeks to breed
Appaloosas with quiet dispositions that are easily trained and
are suitable for the amateur riders in her target market.
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Last modified: May 25, 2011