J. Michael and Susan Reimer - Page 6




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          full-time employment with Borg Pontiac, an automobile dealer, and           
          then at Village Pontiac, another automobile dealer.  In 1993, Mr.           
          Reimer testified that he made a conscious decision to end his               
          involvement with NSA.  Mr. Reimer terminated the NSA activity               
          either in 1993 or early in 1994, at the latest, by writing a                
          letter of termination and returning all remaining inventory to              
          NSA.                                                                        
               Mr. Reimer’s NSA activity was reported on Schedules C for              
          the tax years 1991 through 1994, as a secondary activity separate           
          from petitioners’ horse breeding activity.                                  
          C.   Horse Breeding Activity                                                
               Petitioners’ horse breeding operation first began around               
          1976.  This activity was originally named J-Mar Arabians.                   
          Petitioners changed the name to Summer’s End Farm upon their move           
          from Ohio to Oswego, Illinois, in 1989.                                     
               In 1971, petitioners purchased their first purebred Arabian            
          foal, J-Mar Elbravado.  They thought J-Mar Elbravado would become           
          a stallion and could be bred.  About 3 years after the purchase             
          of J-Mar Elbravado, petitioners learned that the stallion had a             
          cryptorchidism (recessed testicle) which rendered him useless for           
          breeding.  Petitioners had J-Mar Elbravado gelded in 1974, but              
          they still continued to show him in Arabian horse shows.  He was            
          sold in either 1977 or 1978 for an undisclosed amount.                      








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