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petitioner had established a limited liability company called
Ghost Oak Farm, L.L.C., to operate the Newberg property. She
currently earns approximately $3,000 per month from Ghost Oak
Farm, L.L.C.
Petitioner filed her Federal income tax returns for the
years at issue on April 5, 2004. Respondent sent petitioner
notices of deficiency for the years at issue on April 19 and 26,
2004, respectively. The notices of deficiency for the years at
issue were based upon third party payor information and not upon
information reported on petitioner’s filed returns.
The parties have stipulated that the income reported on
petitioner’s Federal income tax returns for 1998 and 2001 is
correct. Petitioner’s claimed itemized deductions are not in
dispute. Petitioner reported the income and expenses from her
horse boarding and training activities on Schedule C, Profit or
Loss From Business, but concedes that the expenses attributable
to the activities are not deductible pursuant to section 162.
Rather, petitioner contends that the horse boarding and training
expenses are deductible pursuant to section 212. Respondent
concedes petitioner engaged in horse boarding and training
activities for profit5 beginning in 1998 and does not dispute the
5 Respondent does not argue the application of sec. 183.
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