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Expertise of and Effort Expended by the Taxpayers
Respondent does not challenge either petitioners’ expertise
or the time and effort expended on the activity at issue. We
believe that petitioners have established, through credible
testimony, that they not only were well possessed of the
knowledge necessary to operate a horse-boarding business, but
that Mr. Rozzano contributed vast amounts of time to the
operations at Sugar Tree. First, petitioners were well aware
from their experience as horse owners of the requirements for
boarding horses before they commenced activity at Sugar Tree.
Second, horse-boarding, unlike other horse-related endeavors,
such as breeding and training, while it entails risk, to be sure,
is rather simple in its day-to-day execution; horses are taken
out to pasture (“turned out”), fed, returned to stables to rest,
taken out again, fed again, and retired to their stables. There
is nothing in the record that suggests that petitioners were not
well versed and extremely competent in these practices.
Finally, although we suspect that Mr. Rozzano’s testimony
that he spent every weekend and holiday for 10 years performing
upkeep at Sugar Tree may be an overstatement, we find him a
credible and forthright witness overall and moreover, we believe
that he performed most, if not all, of the major upkeep projects
on Sugar Tree himself. Therefore, we believe that the expertise
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Last modified: November 10, 2007