Performance Horse Breeders Win in Tax Court

Guten Tag aus Hannover, Germany, dear Equine Law Blog readers!

For the first time since the Equine Law Blog's inception in early 2008, we are broadcasting "live" from a location outside the United States!  Speaking of the United States, this update is to let you know about the good news found in the U.S. Tax Court decision Blackwell v. Commissioner, decided on August 8, 2011. 

Minnesota performance horse breeders Mark and Patti Blackwell of Fresh Horses Farm stood up to our dear Uncle Sam and they prevailed in a hobby loss case! 

See this related post for more details on why this win is significant.

Why the Blackwells won, in a nutshell [according to the opinion]:

--They developed a "rather comprehensive" written business plan;

 --They prepared to start up the breeding and training activity by taking educational courses and consulting experts;

 --They were not "absentee, aloof, or recreational" horse owners;

 --They made adjustments, as necessary, in their business plan and activities in an effort to make a profit;

--They maintained reasonably good books & records of income and expenses related to their horse activity.

My take aways:  Keep good business records and a written business plan; do as much as you can yourself so that you're not "absentee" or "aloof"; do research and consult experts as to how you might make a profit int he horse business and change things up if you find that the business plan is not working out.

About the picture Before I head to the great horse shows at Luhmühlen and Augsburg, I am staying a couple of days with my former host parents from my days as a Rotary Youth Exchange student (Eberhard and Renate Nickel).  Eberhard Nickel [pictured, on the way to the courthouse this morning] is a German attorney who specializes in construction law and public finance law.  The lawyers in Germany still wear robes to court [but I'm told they never wore wigs].

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