- 21 -
assets, computer program, and files. The fact that petitioner is
known on the basis of her name to her clients in the equestrian
world does not somehow make her activities with her equestrian-
related contacts separate from her design business, which also
bears her name.
We also are aware that for the years at issue, C.P.A.
Borofsky reported the activities on two separate Schedules C.
Positions taken by a taxpayer in a tax return are treated as
admissions and cannot be overcome without cogent proof that they
are erroneous. Mendes v. Commissioner, 121 T.C. 308, 312 (2003);
Estate of Hall v. Commissioner, 92 T.C. 312, 337-338 (1989).
Based on the plethora of evidence that the two undertakings
constitute a single activity, we find that petitioner has
overcome that position.
We find that a close organizational and economic
relationship exists between the equestrian and the design
undertakings. Accordingly, we determine that for purposes of
section 183, the equestrian undertaking and the design operation
constitute a single activity. We need not consider whether
petitioner engaged in the equestrian-based design business with
the objective of making a profit because the combined activities
were profitable in each of the years at issue.4
4Petitioner argues that the presumption under sec. 183(d)
applies. Under sec. 183(d), in the case of an activity
consisting in major part of the breeding, training, showing, or
(continued...)
Page: Previous 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Next
Last modified: November 10, 2007