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horses in 1991, the purported year of the plan. Moreover, while
petitioner did breed one of her horses in 1991, she declined to
breed any of them again until 1997. She also did not sell a
horse for consideration until 2001.
Petitioner also relies erroneously on her assertion that
respondent did not challenge her substantiation of the expenses
reported on the subject returns. Respondent in the notice of
deficiency did reflect such a challenge as to the amounts of
those expenses that equaled the amounts of the reported losses.16
The notice of deficiency states specifically as to those expenses
that “it has not been established that the claimed expenses were
incurred or, if incurred, paid by you during the taxable year for
ordinary and necessary business purposes or that any claimed
amount qualifies as an allowable deduction under the provisions
of the Internal Revenue Code.” Moreover, even if respondent had
declined to make this challenge, it would not have meant as
petitioner would have it that she kept and used books and records
for the horse activity in a businesslike fashion. See Golanty v.
Commissioner, supra at 430; Burger v. Commissioner, T.C. Memo.
1985-523; accord McKeever v. Commissioner, T.C. Memo. 2000-288
(taxpayers’ ability to substantiate claimed expenses does not
16 In other words, respondent for each of the subject years
allowed petitioner to deduct her claimed expenses up to the
amount of the gross income from the activity that she reported
for that year.
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