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Petitioners’ next business plan is entitled “Summer’ [sic]
End Farm 10 Year Plan Financials” (1990 business plan). The 1990
business plan did not carry over the prior period’s “net
cumulative” amount, thus starting from scratch. Based upon the
1990 business plan, petitioners projected a net profit in 1992.
Petitioners testified that the business plans were written
within a year or two from the beginning of the time period
covered in each plan. Petitioners did not conduct an income or
expense summary based on actual amounts incurred or expended for
any given time period. Petitioners stipulated that they did not
revise any of the above business plans or financial projections
after the plans were written.
Each plan also included an attached narrative summary of
what occurred in the prior period.
Petitioners printed business cards and brochures to promote
the horse breeding activity. Petitioners also maintained a
separate checking account for the horse breeding activity.
Petitioners were members of various Arabian horse
associations during the years in issue, including the
International Arabian Horse Association (IAHA) and American Horse
Shows Association.
E. Petitioners’ Time and Effort
Petitioners divided the work responsibilities for their
horses. Mrs. Reimer handled most of the labor and the horses’
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