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their mares and sometimes used top-ranked stallions, their
efforts to market their horses were unfocused and anemic prior to
and during the years at issue. Petitioners did not sell any
horses during the years at issue, and the only sales that have
occurred through June 1998 have been culling sales. None of the
changes made during the years at issue, including petitioners’
reliance on Dr. Cortelezzi, had any material impact on
profitability.
Petitioners’ marketing and sales efforts have changed
little since the inception of the enterprise. Relatively little
has been spent on advertising. Cf. Burrow v. Commissioner, T.C.
Memo. 1990-621. Petitioners advertised their operation and the
availability of their horses in trade magazines, journals, and
via local horse show sponsorships and parades. Petitioners also
showed, on average, two or three of their horses each year at
regional events on the West Coast. However, petitioners had no
marketing plan; they did not even have business cards until 1993.
Considering the importance of horse sales to their business plan,
petitioners’ failure to attempt to reach a larger customer base
is not consistent with the behavior of a profit-minded taxpayer.
See Dodge v. Commissioner, T.C. Memo. 1998-89, affd. without
published opinion 188 F.3d 507 (6th Cir. 1999).
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