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earned, or expect to earn from their horse racing activity
resulted, or will result, from purses.
As of the date of trial, for any given year since acquiring
their first race horse in 1986, the income earned from their race
horses has never exceeded the expenses that they incurred to
maintain, race, and breed their horses.
During 1994 petitioners entered into two stallion service
contracts. In one they agreed to mate Jordan’s Tan with Gilded
Age; the stud fee was $750. In the other they agreed to mate
Hilarious Astro with Two Punch; the stud fee was $3,500. Two
Punch is the grandson of a Kentucky Derby winner. Over the
years, Two Punch’s offspring have earned over $1,000,000 in
purses. In the latter stallion service contract, petitioners
were guaranteed “a live foal that can stand up and nurse without
assistance by midnight of the seventh day after the day of
birth”. The entire contract with respect to the stallion service
contract involving Jordan’s Tan has not been made part of the
record, but it appears that it contained a similar guaranty.
Hilarious Astro produced a foal in 1994 as a result of being
bred to Two Punch. In 1996, the foal ran into a fence and
injured its leg.
During 1994, Otis Jordan was employed by Superior Paving
Corp. His wages from that employment for that year were
$42,128.20. Other than the horse racing activity, his wages were
petitioners’ sole source of income. He devoted some time to the
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