Richard J. and Melodie D. McKeever - Page 15




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            also took blood samples from, wormed, and inoculated their                                 
            horses.  In addition, Mr. McKeever handled and halter trained                              
            weanling paso finos until they reached the age of 2-1/2 years.                             
            Petitioners hired someone to clean the Norco ranch stables.                                
                  Petitioners love their horses and enjoy the work associated                          
            with the horse activity.                                                                   
            Purchase of the Norco Facility                                                             
                  Petitioners resided in Anaheim, California, when they began                          
            their horse activity.  They sold their residence during 1987 and                           
            moved to Yorba Linda, California.  The Yorba Linda residence had                           
            a four-stall barn.  In 1991, petitioners sold the Yorba Linda                              
            residence and purchased a 3.6-acre ranch in Norco, California,                             
            for approximately $316,000 (the ranch).  City zoning allowed                               
            petitioners to keep approximately 39 horses on the ranch.  By                              
            1998, the ranch had in excess of 20 horse stalls and pasture                               
            space capable of accommodating an additional 10 horses.                                    
                  After they moved to the ranch, petitioners improved it in                            
            several respects.  Beginning in 1991, petitioners expanded the                             
            then-existing barn and constructed an additional barn, an arena,                           
            and a round pen.  They graded and installed an irrigation and                              
            drainage system, and they installed pipe corrals and fencing.  By                          
            the end of 1994, petitioners substantially had completed                                   


                  8(...continued)                                                                      
            their herd at Mr. Minter’s Rancho Paso de Bravo and visited the                            
            animals on weekends.                                                                       





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