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Petitioner built the arena in 1990 by himself for the horses
to exercise. Petitioners do all of the maintenance and repairs
on the fence and the buildings.
In December 1998, petitioners’ property, including the farm
improvements, was worth $155,000. The farm improvements had a
fair market value, as of December 23, 1998, of $47,000.
5. Operations
Petitioners spent much of their free time training, showing,
and caring for their horses. In 1995, petitioner spent more than
1,600 hours and Mrs. Davis spent more than 700 hours on the horse
activity. Petitioner had no other full-time employment during
the years in issue.
Petitioner spent a large amount of time each week from 1991
through the years in issue caring for and training petitioners’
horses at the McDannald Arabian facility. Petitioners provided
all of the care for their horses except when the horses were at
McDannald’s farm.
Petitioners were actively involved in preparing their horses
for the show ring during the years in issue. Petitioners filmed
each of their horses at horse shows so they could critique their
performance.
In 1994, petitioners named their horse activity “Midwest
Spanish Arabians”. In 1995, petitioner began to use letterhead
with the Midwest Spanish Arabians logo for their horse activity.
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