- 14 -
for his own account in 1988. His plan was to buy quarter horses,
train them to be cutting horses, show them, establish their
reputations, and sell them. The shows petitioner planned to
enter were competitions for cash prizes. Petitioner entered his
horses in such competitions from 1987 through 1996. Petitioner
sold 19 horses from July 1, 1990, through June 1, 1996.
Petitioner made only $150 from training other persons’ horses.
The nature of petitioner’s activity during the years in issue
(the Schedule F activity) was the showing of and sale of cutting
horses.
2. Not an Activity Engaged in for Profit
The Schedule F activity resulted in substantial losses, not
only during the years in issue, but also during preceding and
following years.
During the years in issue, petitioner sold five horses, two
in 1992 and three in 1993, and had a net loss and a net gain of
$6,726, and $21,507, respectively. Thus, for the years in issue,
petitioner realized a net gain of $14,781 from the sale of horses
($14,781 = $21,507 - $6,726). His horse show expenses for 1992
and 1993 exceeded his horse show income for those years. His net
farm losses for the 2 years were $213,838 and $269,913, as
reported on the 1992 and 1993 Schedules F, respectively, for a
total of $483,751. Thus, for 1992 and 1993, petitioner incurred
Page: Previous 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 NextLast modified: May 25, 2011