Richard J. and Melodie D. McKeever - Page 4




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            experience in breeding, showing, or selling horses.  By the time                           
            they began their horse activity, petitioners had acquired only                             
            general experience in owning, caring for, and riding horses.                               
            Petitioners have never taken any classes or attended any programs                          
            regarding the financial or business aspects of horse breeding and                          
            showing.                                                                                   
                  Petitioners chose the paso fino breed for their horse                                
            activity for a variety of reasons.  Petitioners admired paso                               
            finos for their beauty and smooth-gaited ride.  Petitioners also                           
            decided that, because of their smooth ride, paso finos are good                            
            for people, like Mr. McKeever, who have back problems.  Prior to                           
            starting their horse activity, petitioners did not research the                            
            marketability of the paso fino breed or determine how they were                            
            most likely to make money with paso fino horses.  Petitioners did                          
            not seek business advice prior to purchasing their first paso                              
            fino horses.                                                                               
                  In August 1987, petitioners purchased their first two paso                           
            fino horses, Chispa Nuac and Sol Rey de Pito, from Dorothy                                 
            Sarnecky for a total of $15,000.  During 1988, petitioners had                             
            discussions with Ms. Sarnecky and Charles Minter which confirmed                           
            petitioners’ perception that paso finos have an excellent                                  
            disposition and that they are marketable.                                                  










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