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tioners’ total tax liabilities for their taxable years 1996 and
1997, respectively.
At a time not disclosed by the record, petitioners jointly
filed Form 1040 for their taxable year 1999 (petitioners’ 1999
return). That return included Form 4797 (petitioners’ 1999 Form
4797). In Part II of that form, Ordinary Gains and Losses,
petitioners claimed an ordinary gain of $89,471. In an explana-
tory statement attached to petitioners’ 1999 Form 4797, petition-
ers claimed that that ordinary gain was attributable to, inter
alia, the sale of three of the racing and breeding horses that
Kildare Timmy distributed to Mr. Ramsburg. Petitioners claimed
the following with respect to the sale of those three horses:16
Date Date Cost Gain
Horse acquired sold Sales Price or basis or (loss)
J R Ramsburg 01/01/98 06/04/99 $3,585 $7,090 ($2,067)
Stables
J R Ramsburg 01/01/98 11/05/99 61,050 2,655 58,933
Stables
J R Ramsburg 01/01/98 11/05/99 32,457 2,705 30,301
Stables
Total to be included in Form 4797, $97,092 $12,450 $87,167
Part II, Line 10
At a time not disclosed by the record, petitioners jointly
filed Form 1040 for their taxable year 2002 (petitioners’ 2002
16Although petitioners’ 1999 return did not provide the
names of the three horses that Mr. Ramsburg sold, the cost or
basis of each of those horses that was reported in petitioners’
1999 return (i.e., $7,090, $2,655, and $2,705) is the same as the
gross sales price that was reported in Kildare Timmy’s 1998
partnership return with respect to each of the horses Bar B Wars,
Justen’s Western, and Western Shuffle that Kildare Timmy distrib-
uted to Mr. Ramsburg on Jan. 1, 1998, and that petitioners claim
Kildare Timmy sold to Mr. Ramsburg on that date.
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