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B. Whether We Should Treat 1995 as the Startup Year of
Petitioners’ Farm and Horse Activity
Petitioners contend that we should treat 1995 as the startup
year of their farm and horse activity because, in 1995, Mrs.
Berry began to work full time on the farm, to supervise employees
more closely, to organize activities better, and to repair and
expand the barn to accommodate more broodmares. Petitioners
contend that, even if they did not have a profit motive before
1995, they did in 1995.
It is true that Mrs. Berry worked full time on the farm in
1995. However, we do not view Mrs. Berry’s change to full time
as the commencement of petitioners’ farm and horse activity. The
record does not show how much more time Mrs. Berry devoted to the
farm in 1995 than in prior years. Mrs. Berry worked part time as
Dr. Berry’s office manager before 1995. She had a flexible
schedule that allowed her to work on the farm when needed.
Repairing and expanding the barn was not the commencement of
petitioners’ farm and horse activity because the barn had
accommodated 16 broodmares before 1995. Petitioners’ use of
improved breeding stock after 1995 is not directly relevant to
whether petitioners had a profit motive during 1995.
Petitioners contend that their hay, stud, and horse boarding
activities increased in 1995 and thereafter when Mrs. Berry
worked on the farm full time. We are not convinced that their
activities increased significantly or even at all in 1995 because
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