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Petitioner invested the $20,000 in an individual retirement
account.
c. TF Silent Reign and Mon Reve
Petitioner bought TF Silent Reign in 1989 for $3,500. In
1997, petitioner transferred TF Silent Reign to her daughter,
Michelle Pope (Ms. Pope), for zero dollars. Petitioner and Ms.
Pope had an oral agreement that Ms. Pope would breed TF Silent
Reign and pay all related expenses, and they would split all
future profits, if any, from the breeding.
In 1999, Ms. Pope bred TF Silent Reign to Monogramm, an
Arabian stallion from Bishop Lane Farm. On March 8, 2000, TF
Silent Reign produced a filly named Mon Reve.
3. Petitioner’s Horse Activity Business Plans
a. Annual Business Plans
Ms. Pope is a certified public accountant (C.P.A.). With
the aid of Ms. Pope, petitioner prepared “annual business plans”
for the years 1989 through 1994. Each annual business plan is a
one-page fill-in-the-blank form with handwritten responses. Each
annual plan was prepared in the spring or summer of the year to
which it relates.
In the 1989 annual plan, petitioner listed her long-term
goals as “Sell Borissa’s foal. Estimate value after one year
7,000 to 10,000. Rah’s [Feyras Raehele’s] foal for show estimate
value if National winner approximately 50,000.”
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Last modified: May 25, 2011