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computer data was lost sometime thereafter and petitioners
resumed keeping their receipts and handwritten summaries.
6. Petitioners’ Personal Enjoyment of Horses
Petitioners ride their horses only to train or show them.
Petitioners’ children and grandchildren do not ride petitioners’
horses.
Petitioner finds his Arabian horse activity to be rewarding.
He enjoys showing the horses, competing at the shows, and the
camaraderie of other horse people at the shows. Petitioner does
not enjoy the amount of driving that is required to participate
in horse shows or to train petitioners’ horses at McDannalds.
7. Petitioners' Gross Income, Appreciation, and
Horse-Related Losses
Petitioners reported the following amount of taxable income
on their tax returns from 1990 to 1996:
Taxable income Horse
(other than expenses
horse Horse including Horse Taxable
Year activity) income depreciation Depreciation lossesincome
1990 $263,832 -0- ($10,938) ($3,600) ($10,938) $252,894
1991 49,749 $120 (20,544) (6,369) (20,424) 29,325
1992 46,824 205 (19,652) (4,729) (23,935) 22,889
1993 44,498 190 (23,346) (3,912) (23,172) 21,326
1994 57,596 295 (26,018) (4,493) (25,723) 31,873
1995 60,215 519 (33,478) (3,490) (32,959) 27,256
1996 55,969 434(29,164) (2,572) (28,730) 27,239
Petitioners reported on financial statements dated August
11, 1992, and June 11, 1993, that their horses were worth
$34,000. They reported on a financial statement dated July 21,
1995, that their livestock was worth $80,500.
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