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taxpayer conducted the activity for profit. Engdahl v.
Commissioner, 72 T.C. 659, 666-667 (1979); sec. 1.183-2(b)(1),
Income Tax Regs.
Petitioner did not maintain accurate and complete books and
records for M&S. Petitioner testified that it was not his
practice to use bills of sale or purchase agreements when horses
changed ownership. The documents that petitioner provided as
bills of sale were computer-generated, and petitioner admitted to
printing them from his computer hard drive in preparation for
trial. Petitioner testified that it was not the general practice
in the industry to provide bills of sale and that the important
documents were the registration document and transfer report. At
the time of trial, however, petitioner was unable to provide
registration documents for any horse that he owned, and he did
not have copies of transfer reports for any horses that he
purchased or sold during the years in issue. Petitioner did not
maintain records of the breeding of any mares.
The materials that petitioner provided as evidence of his
advertising were also computer-generated and were printed in
preparation for trial. Petitioner provided no evidence of
original advertisements used by M&S. Petitioner had no record of
correspondence from other persons. The correspondence he
provided was also computer-generated and was prepared for trial.
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