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Petitioners’ second plan, entitled “J-Mar Arabians 5 Year
Plan - Revised: 1975-1980" (revised 5-year plan), carried forward
the overall net loss of $8,500 from the 1971 business plan, and
continued to make projections through 1980. At the end of 1980,
petitioners projected assets worth $19,450 and an overall net
loss of $18,650.
Petitioners’ third business plan, entitled “J-Mar Arabians 5
Year Plan - Revision II: 1980-1985" (second revised 5-year plan),
also carried forward the projected net loss of $18,650 in 1980
(from the revised 5-year plan) as the starting point for the 1980
to 19892 projections. According to the second revised 5-year
plan, petitioners would yield an overall net profit of $23,850 in
1988, or year 18.
In 1985, petitioners drafted a proposed limited partnership
agreement for the purchase of a one-third interest in Sassafras
and Tender Moment by a third party. Included in the proposal are
the following documents: An estimated 5-year cashflow, estimated
fair market value of the horses (Sassafras valued at $200,000 and
Tender Moment valued at $300,000), payment terms, and cash
reconciliation with depreciation. This partnership was never
formed.
2 Petitioners’ financial projections were for the time
period 1980 through 1989, even though their business plan was for
the period 1980 through 1985.
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