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Petitioner is currently employed as an attorney by Texas
RioGrande Legal Aid, Inc. In 2001, petitioner worked part time
at Texas Rural and Legal Aid and performed contract work for
another attorney. She had both wage income and Schedule C,
Profit or Loss From Business, income from her work as an
attorney. Petitioner’s husband is a social worker.
Neither petitioner nor her husband rides horses. Petitioner
was introduced to horse showing and breeding activities by her
long-time friend Cindy Pruitt (Ms. Pruitt), who also raised
horses in her spare time. Petitioner studied Ms. Pruitt’s
operations for over a year and began accompanying her to horse
shows; petitioner herself joined the Appaloosa Horse Club in
1998. Fascinated with Appaloosas because of their beauty and her
enchantment with their history in Native American lore,
petitioner’s own horse showing and breeding activities began in
1998 when she purchased her first horse, a 2-year-old Appaloosa
stallion named Skips Jrs. Shado (Skippy), from Ms. Pruitt for
$2,000. Skippy got sick and died in 1999.
A few months after she purchased Skippy, petitioner
purchased a mare named Sarah Air for $4,700. The mare was
pregnant at the time of the purchase and, a few weeks later,
foaled King Shados Air (King).3 Petitioner sold King for $5,300
3 Although petitioner purchased the mare in May 1998, she
did not take official ownership of the horse or her foal until
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