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interest to any particular donee, and it did not contain a
separate valuation of each FLP. The valuations by Mr. Kramer and
Mr. Koehl were the only valuations referenced in petitioners’
returns.
Rance’s Schedule F Activity
Rance began his cutting horse activity with a few horses in
1999. During the years at issue, Rance maintained several horses
in his cutting horse activity. For the taxable years 1998
through 2005 Rance reported the following total income, expenses,
and net losses:
Year Income Expenses Net Losses
1998 -0- $124,291 $124,291
1999 -0- 76,352 76,352
2000 -0- 65,486 65,486
2001 $1,736 83,630 81,894
2002 3,817 83,691 79,874
2003 4,583 48,903 44,320
2004 4,084 66,677 62,593
2005 1,959 44,474 42,515
Total 16,179 593,504 577,325
The expenses were generally attributable to depreciation, animal
and land maintenance, mortgage interest, and training. Other
than the Schedules F, Profit or Loss From Farming, which were
part of the tax returns and banking records, Rance did not
maintain books and records of his horse cutting activity.
Rance rides his own horses at horse futurities (shows), and
he first rode horses when he was a child and continued to ride
when he attended college. He became involved in the cutting
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