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Horse Training and Breeding Activity
Petitioners purchased a 115-acre farm in 1994. Starting in
1994, petitioner decided to breed, train, and sell horses.
Before this, petitioner was not involved in horse training or
breeding. Petitioner’s previous experience with horses consisted
of riding them as a child. Petitioner derived personal pleasure
and enjoyment from riding horses.
In 1997 and 1998, petitioners owned 14 horses. Petitioner
and his children rode the horses. Petitioners’ children fed,
groomed, and cared for the horses and performed “groundwork” on
the farm. The children also rode the horses in 4-H Club
competitions in 1998.
Petitioner sold three horses in 1997 and two horses in 1998.
Petitioner purchased two of the horses sold in 1997 for $2,500,
and the third was foaled on the farm. Petitioner received $4,000
for the three horses sold in 1997. Petitioner purchased the two
horses sold in 1998 for $1,650. Petitioner received $1,850 for
the two horses sold in 1998.
Petitioner maintained inadequate records of the horse
activity. Petitioner did not prepare, nor did he have a
qualified professional prepare, financial projections or a
business plan for the horse training and breeding activity.
Petitioner did not keep business invoices for the sales of
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Last modified: May 25, 2011