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horse. Petitioner also utilized the training services of an
individual at Dallas, Texas.
According to petitioner, the income to be expected from
paint horses was from breeding. There were no monetary awards to
be had from participating in shows except that favorable ratings
for a stud enhanced the breeding fees that could be charged.
Petitioner presented no evidence to establish what success or
achievements he attained from the participation of his horses in
shows.
Petitioner realized no gross income from his horse activity
in either 1995 or 1996. The record does not show what expenses
petitioner incurred during 1995. On his 1996 joint return,
petitioner, on Schedule C, Profit or Loss From Business, claimed
expenses totaling $23,280 and a net loss for that amount, all
from the horse activity. For 1997, petitioner reported on
Schedule C a net profit of $829.5 In early 1998, petitioner
terminated the activity after his creditors foreclosed on the
horses. Petitioner, at that time, was unemployed and was unable
to continue financing the activity.
5 Petitioner's 1997 Federal income tax return was not
offered into evidence, nor were any books and records offered for
that year. Counsel for respondent stated he had obtained a
computer printout of the return, and petitioner reported, for
1997, gross receipts of $17,500, expenses of $16,671, and a net
profit of $829. Petitioner did not address the sources or the
nature of the gross receipts.
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