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tripled by the end of the sixth year. It is also undisputed that
the “drop” rate-–i.e., calving rate-–for petitioners’ cows was
generally between 80 and 90 percent.13 Consequently, the number
of productive cows was clearly growing, suggesting the retention
of female offspring for this purpose. Accordingly, petitioners’
claim that they were building a herd during the years in issue
finds substantial corroboration in the herd inventory records
they maintained. In addition, Dr. Burrus’s claim that he
anticipated being able to sell purebred horned Hereford bulls for
approximately $2,000 is substantiated in the financial ledgers,
which record sales of bulls at prices in this range.
In short, the business plan claimed by petitioners is
corroborated in the records they maintained. The herd
inventories were also adequate to document the herd’s
productivity, to an extent sufficient to earn recognition from
the AHA. Two of petitioners’ cows earned AHA awards based on
productivity in 1998; since the awards were based on the cows’
production of nine and six calves respectively, it is clear that
petitioners’ records extending back into the years in issue were
considered reliable and accurate by the AHA. Cf. Stonecipher v.
Commissioner, T.C. Memo. 2000-378 (section 183 applicable to
13 Both Dr. Burrus and respondent’s expert testified that
calving rates in this range were the norm.
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