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never personally observed two of the horses valued in her
report, TF Silent Reign and Mon Reve, instead relying on
still-shot photographs.
We find that Ms. Esler’s report does not comply with
Rule 143(f), as it fails to set out in detail the reasons
for her conclusions. We further find that Ms. Esler could
not adequately explain her report at trial and her answers
to many questions raise doubts as to the reliability of her
valuations.
Because petitioner introduced no other evidence
regarding the values of her horses, those values cannot be
considered in determining whether petitioner engaged in her
horse activity for profit.
c. Summary
As outlined above, the fair market value of Falling
Water Way and Gavilan Hills can be taken into account in
considering this factor. Petitioner purchased Falling Water
Way for $135,000 and Gavilan Hills for $70,000. As of June
15, 2004, the fair market value of the horse facilities and
land at Falling Water Way was $375,000, and the fair market
value of Gavilan Hills was $306,000. Falling Water Way and
Gavilan Hills have appreciated substantially, and petitioner
can reasonably expect the properties to continue to
appreciate. Therefore, we find that this factor weighs in
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