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During 1993 petitioner owned 28 dogs. Some of the above
expenses related to the maintenance (including feeding, grooming,
and veterinarian services) of those dogs. The dogs were kept in
an addition to petitioner's residence that was constructed for
that purpose.
The $525 of income petitioner reported on the Schedule C
consists of a single stud fee ($150) and the sale of one puppy
($375). Stud fees and puppy sales are the only ways in which
petitioner expected to generate income from her dog breeding
activity.
Dog breeders gain recognition for themselves and their dogs
by entering their dogs in shows sanctioned by the American Kennel
Club and sponsored by various organizations. Dogs that have
successfully competed in shows attract customers interested in
obtaining stud services or purchasing puppies from dogs owned by
the breeders.
During 1993 petitioner entered only five of her dogs in
various shows. The shows were held at various locations in
different states. Some shows were scheduled in clusters over a
three or four-day period. Typically petitioner was required to
pay a fee to enter her dogs in a show. The shows did not award
cash prizes to the winners. As explained above, the financial
reward for winning came in the form of enhancing the winner's
reputation for breeding purposes, which in turn resulted in more
demand and higher fees for the breeding services of the winner.
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