- 16 - in their child’s horse show activity than in making a profit). We disagree. The taxpayers in that case had no experience with horses before they began their horse activity. The taxpayers’ son began competing 3 years before they began their horse activity. He showed great potential as a rider the year before they started the activity. Respondent contends that petitioners’ failure to own a stallion was inconsistent with their business plan and restricted their ability to make a profit. We disagree. Petitioners did not own a stallion because that would require them to pay to acquire and maintain the stallion and to modify their facilities. Respondent contends that petitioners’ mares were not good enough to support a profitable breeding program. It was too early to tell whether respondent’s speculation is correct in 1995 and 1996, the third and fourth years of petitioners’ horse breeding activity. Respondent contends that petitioners did not advertise their horse activity in a businesslike manner. We disagree. Petitioners advertised horses for sale in a local newspaper. They also showed their horses. See Engdahl v. Commissioner, 72 T.C. at 662-663, 667 (“Horse shows are the best form of advertising for American saddle-bred horses.”); Golanty v. Commissioner, 72 T.C. 411, 430-431 (1979) (taxpayers’ failure to show horses indicated that taxpayers were not engaged in activityPage: Previous 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Next
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