- 22 -
We disagree. Petitioners’ financial statements for 1992,
1993, and 1995 show that petitioners believed their horses were
valuable and were increasing significantly in value. Petitioner
credibly testified that he expected petitioners’ horses and farm
improvements to appreciate in value and that he expected to
recover his losses by selling the appreciated assets. Thus, we
give little weight to the fact that petitioners’ business plan
contained no projections of appreciation in the value of
petitioners’ business assets.
Petitioners’ expectations were substantially corroborated by
appraisals they obtained from O’Connor. Respondent did not
challenge O’Connor’s appraisals for most of the horses except to
point out that she used a 1998 valuation date.
Respondent contends that O’Connor did not consider the
effect Brigitta La Brisa’s inability to breed from 1990 to 1997
had on her value in 1996. We disagree. O’Connor did consider
the fact that Brigitta La Brisa had difficulty breeding because
she appraised her with foal ($30,000) and without foal ($20,000).
Using the $20,000 amount in estimating the appreciation in value
of petitioners’ horses, petitioners still had a substantial
amount of appreciation from their horses.
Respondent contends that petitioners should not have
included Brilliant and Spanish Ballerina in their estimate of
appreciation because they were born after 1996. We disagree.
Page: Previous 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 NextLast modified: May 25, 2011