MORE ON MITTEN$ AND HIS TAXES

(h/t The Dish)

Lee A. Sheppard provides a good summary analysis of Mitten$ tax schemes on taxanalysts.com. This is the section I liked best:

Ann Romney's Olympic horse. Issue: Is Rafalca a business?

Probably not. Before the Romneys can claim any passive loss deduction for Ann Romney's share of Rafalca's expenses, the LLC that owns the horse, Rob Rom Enterprises, has to be engaged in a trade or business. For that, it has to satisfy the hobby loss rule for horses, which has a rebuttable presumption of a business if there is a profit in two out of seven years (section 183(c)). Rob Rom has owned Rafalca for six years.
Rafalca's rider said she would be bred when her show career was over. That may be a stretch, because the horse is 15 and has been in strenuous competition for 11 years. If she could produce a foal or two, it would have to be sold for $500,000 or more.
Moreover, the prize money in dressage competitions doesn't come close to covering the roughly $120,000 per year for Rafalca's upkeep and transportation from California to European competitions. So it is unlikely she would ever make a profit for her owners. (For discussion, see Tax Notes, Aug. 6, 2012, p. 627, Doc 2012-16145, or 2012 TNT 148-1.)