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the time of trial would be worth $80,000.8 Zane was particular
about breeding his dogs, and he would breed his dogs only with
high-quality dogs.
At the time of trial, Zane was selling Terrier puppies for
amounts ranging from $1,500 to $2,000. No information was
provided, however, as to the selling price for puppies during the
years at issue. Zane believed that one of his dogs was worth
$50,000, although no evidence, other than his testimony, was
offered to support his belief.
1. Manner in Which the Activity Is Conducted--Zane did not
maintain a separate bank account for his dog activities, and no
other records of this activity were produced. For example, there
were no records showing: Purchase of dogs; financial analysis of
their potential for profitability; formal business plan, budgets,
operating statements, and analyses of cost control. Zane did not
calculate the amount of income he would need to recover the
losses incurred, and he did not predict when the activity might
become profitable. He did, however, invest a substantial amount
in the training and showing of Terriers worldwide in order to
document their quality.
8 Because multiple straws are needed for an insemination,
the number of possible inseminations would be reduced by some
mathematical factor. One report in the record indicated that
approximately 7.9 straws was the factor. If that were correct,
80 straws would result in approximately 10 inseminations for
total revenue of approximately $20,000.
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