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Excluding 1996, the average yearly entry fee and show cost
expense of the horse activity was $57,512.
During the years in issue, petitioners showed the horses
they owned at least 46 times. In 1996, petitioners’ horses that
were “serviceable” were “in the ring” at shows petitioners
attended. In 1996, petitioners’ horse named “Fran’s Guy” was in
the ring at horse shows one to two times per show attended and
was in the ring at least 30 times over the course of the year.
This meant that during 1996 petitioners entered their horses in
at least 15 shows.
Petitioners reported the following ordinary income and
losses from the horse activity:
Year Ordinary Income/(Loss)
1991 ($147,118)
1992 (366,350)
1993 (427,947)
1994 (373,694)
1995 (361,854)
1996 13,703
1997 (455,624)
1998 (437,051)
Petitioners incurred $1,676,963 of losses through 1995 and
$2,555,935 of losses through 1998. During these years, the loss
from the horse activity averaged $319,492. Excluding 1996, the
losses averaged $367,091.
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