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quarter horses. He sold some quarter horses to petitioners.
Steven Mobley (Mobley), a certified public accountant, prepared
petitioners’ income tax returns for 1993 through 1996. Mobley
gave petitioners tax advice for their horse activity. Alderson
and Mobley did not advise petitioners how to make their horse
activity profitable.
7. Petitioners’ Personal Pleasure From Their Horse
Activity
Petitioner gets personal pleasure from raising, training,
and showing horses. She enjoys going to horse shows and seeing
her horses do well. Mr. Strickland gets pleasure from
petitioner’s and Amy Stenger’s success with horses and likes to
work with the foals.
D. Horse Income and Expenses
Petitioners reported the following on their Schedules C
(Profit and Loss) for their horse activity:
Income
1993 1994 1995 1996 Total
Sale of foals $1,700 $1,700
Boarding 400 $10,995 11,395
Show winnings $250 276 526
Riding lessons 160 60 220
Horse leasing 175 2,280 2,455
Gross income 0 410 2,611 13,275 16,296
Expenses Total
Depreciation 1,883 7,190 12,790 14,036 35,899
Other 7,180 12,887 20,819 29,189 70,075
Total expenses 9,063 20,077 33,609 43,225 105,974
Net loss (9,063)(19,667) (30,998) (29,950) (89,678)
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Last modified: May 25, 2011