Dean L. and Cynthia D. Sanders - Page 9




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          cutting horse competitions and claims to have been one of the top           
          nonprofessionals.                                                           
          Petitioner’s Plan                                                           
               Petitioner had no written business plan for the Schedule F             
          activity.  Petitioner intended to buy quarter horses, train them            
          to be cutting horses, show them, establish their reputations, and           
          sell them.  He intended to devote more time to the Schedule F               
          activity following his retirement from Wal-Mart.                            
          Record Keeping                                                              
               During the years at issue, petitioner prepared neither                 
          profit and loss statements nor written projections of income or             
          loss for the Schedule F activity.  He maintained no records of              
          the expenses associated with, or the winnings on account of,                
          particular horses.  Petitioner maintained a separate checking               
          account for the Schedule F activity.  Nevertheless, petitioners             
          often wrote checks on their personal account with respect to the            
          Schedule F activity.  Petitioner wife received the bank                     
          statements with respect to the Schedule F activity checking                 
          account.  She did not always open those statements, nor did she             
          always reconcile the statements with the check book.                        
          Advertising                                                                 
               Prior to and during the years in issue, petitioner did no              
          advertising with respect to the Schedule F activity.  The horses            







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Last modified: May 25, 2011