- 2 -
(1) Whether petitioners’ exotic animal breeding activity
for 2000 and 2001 constituted an activity engaged in for profit
within the meaning of section 183;1 and
(2) if petitioners were engaged in an activity for profit,
whether certain amounts claimed as deductions for 2000 and 2001
should be either disallowed for lack of substantiation or
reclassified as capital expenditures.
FINDINGS OF FACT
The parties have stipulated some of the facts, which we
incorporate in our findings by this reference. Petitioners
resided in Liberal, Kansas, when the petition was filed.
Petitioners
At all relevant times, Dennis L. Knudsen (Dr. Knudsen) was a
medical doctor, specializing in obstetrics/gynecology. Dr.
Knudsen spent his spare time working in petitioners’ exotic
animal breeding operation called El Rancho Exotica (ERE).
Margaret J. Knudsen (Mrs. Knudsen) was the primary operator
and manager of ERE. Mrs. Knudsen also helped part time in Dr.
Knudsen’s medical practice. Mrs. Knudsen completed 32 hours of
business courses in college but does not hold a business degree.
1Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the years in issue, and
all Rule references are to the Tax Court Rules of Practice and
Procedure.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Next
Last modified: March 27, 2008