Mr. Husband was recently profiled in Arabian Horse Times magazine.
That article follows below. © Arabian Horse Times Magazine 2003 Reprinted by permission.

B. Paul Husband; A Friend of the Family in Equine Law
by Christy Egan

Have you ever tried to explain a horse situation to a non-horse person? You become laughingly aware of how often you use certain difficult-to-define equine terms, like cribbing, colic, breaking level or curb strap. Horse people speak a unique language, and like medical doctors or ballet dancers, their terminology is special and often needs more than a simple, cursory explanation. It’s a language that can make discussions with people like insurance adjusters, firemen, policemen and lawyers frustrating, particularly in moments of crisis. And, in those moments of crisis, when you discover someone who speaks "horse," it’s an immenserelief. It’s like facing a climb up 30 flights of stairs and suddenly finding you only have to conquer two

It’s like facing a climb up 30 flights of stairs and suddenly finding you only have to conquer two. It’s like having an issue develop between your horse business and the IRS, and discovering Paul Husband. Paul Husband has been a respected and successful California attorney for over 25 years, concentrating on the equine and entertainment industries. Still, for sheer time on the job, it can’t hold a candle to his years as a horseman. The son of well-known, California Arabian horse breeders Bert and Ruth Husband, Paul was literally brought up on the show circuit in the company of such Arabian horse luminaries as four-time National Champion Khemosabi and his dam, multi-National Reserve Champion Jurneeka. Paul’s years as a horse lover date back to his pre-teens. "Actually, it all began in 1960," Paul laughs, "When my brother Bob (he was 4 at the time) asked for a pony. The pony arrived at our house in the form of a Pinto-Shetland for Christmas. From there we graduated up to a half-Quarter Horse and Half-Welsh horse and then at last, to an inbred *Raffles gelding name an inbred Raffles gelding named Nafrap, that my dad purchased for $550.00."

All of these horse purchases ultimately led to a relationship with noted Arabian horse trainer Jeff Wonnell. It was Jeff who showed Jurneeka at the 1963 Scottsdale Show and then offered her to Burt and Ruth Husband for the heart-stopping sum of $10,000
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"My mother was shocked, I think." Paul recollects, "But my father had taken one look at Jurneeka and fell completely in love. He really wanted Jurneeka. So, after Scottsdale, he borrowed the money and bought her. I was just 13 at the time, and soon after that I went to work at Jeff Wonnell's for the summer. Jeff had recently been hurt by a horse and after we finished the morning chores, he would sit in the arena with his leg elevated for three hours or more and coach me through training sessions with horse after horse. His misfortune became the best instruction I've ever received in the horse business, before or since. In 1964, when I was 14, I appeared in my first major U.S. National Show, catch-riding a horse named Fadiah in the English pleasure class for Sheila Varian."

Eventually, the teenage Paul Husband was coached by the best California trainers of that day. In addition to Jeff Wonnell, and his assistant trainer, Alan Morgan, there was Kit Hall, Skip Carpenter, Roy Traylor, Toni Oppegard, Pete Spears and Gary Brislawn, who eventually ended up in the racing industry. As an English pleasure rider and exhibitor, Paul grew to emulate top horseman Bruce Howard, a master of equitation form. In the Western division he learned a great deal from the inimitable Sheila Varian.

"You know that famous picture of Sheila Varian riding _Bay-Abi with the rope trailing out of the picture?" Paul says. "It was me on the other end of that rope! At the time I was on the wrestling team in high school and Sheila teased me into trying one of my holds on a calf. Well, I was game, and eventually I did get the calf on the ground, but boy it sure wasn't easy. The calf weighed 200 to 250 pounds or so, and I was wrestling at a weight of 130. By the time we were through, both the calf and I were wrecked — covered with cow dung and both our noses bleeding. Then Margaret, who was working for Sheila at the time, came over and threw a calf properly and promptly. It took her about 20 seconds. I was so impressed I yelled, ‘Good throw, Margaret!' A photographer happened to be there at Varian's that day, and when she wasn't laughing too hard to snap shots, she got some great pictures of the bunch of us."

In 1966 Paul was Canadian National Champion Junior Arabian Horse Exhibitor. He also won the Reserve Championship in English pleasure at the Canadian National Show on Jurneeka. In those days, the actual National Championship classes included only halter, but the show itself had a number of classes and performance stakes. In her career, Jurneeka went on to major National wins and _multi- U.S. National Reserve Championships. She also became world famous as the dam of four-time National Champion and leading Arabian sire Khemosabi. Paul Husband graduated from high school, hung up his spurs for the time being, and went off to college to study medicine and play football.

Paul has also been innovative in creating new legal structures for use in the horse business. He reworked the commonly recognized form of Stallion Syndication into a more flexible arrangement that provided a much more efficient management of stallions. It also allowed for a different type of flexible investment in the realm of Stallion Syndication, making the whole process much more feasible for involved parties.

In addition to being in demand as an attorney and advisor by major equine groups (particularly Arabian and Thoroughbred owners and breeders), Paul Husband has been a lecturer and speaker at Universities like Pepperdine and Colorado State, as well as the California State Bar Association and the American Horse Council, on tax laws as they relate to horse breeders, trainers and exhibitors. There is little that relates to horses and law that has escaped Paul. Recently he was working with genuine enthusiasm on a presentation about the Right of Publicity in Horses. "Horses and their owners do have a Right of Publicity, in the names and likenesses of celebrity horses," Paul explains with enthusiasm.

"It’s easy to understand the publicity value of the use of "Lassie’s" or "Trigger’s" names. The same thing applies to a *Bask or a Secretariat."

Eventually, though, I had to settle down and get back on track toward a defensible choice of careers.

"Fortunately for me, a family friend had taken me along to a class at the Southern Cal Law School one day when I was 12," Paul says. I joined a fraternity that specialized in sports, partied a lot and played four years of college football. In my senior year we were conference champions. I studied the game of football harder than I ever studied at school and was very successful as a linebacker. I was even named Best Defensive Player. Eventually, though, I had to settle down and get back on track toward a defensible choice of careers.

"Fortunately for me, a family friend had taken me along to a class at the Southern Cal Law School one day when I was 12," Paul says. "The subject was ‘Conflicts in Law,’ and I thought that I understood a great deal of the lecture. I must have really enjoyed that class because I decided that day that I might become a lawyer. Later, after I had taken undergraduate classes in pre-med at college, I sat down and made the decision to go into law instead of medicine. Nearly 30 years later, I have never looked back, though there was a time when I considered becoming a professional horse trainer. I actually did become an Arabian horse judge, and before I retired from that arena, I judged horse shows all over the U.S., in Canada as well as Australia. No matter where I’ve gone and what I’ve accomplished in my work and my career, Arabian horses have always been the not-so-secret focus of my life."

His love for the Arabian horse gave Paul the incentive to become a recognized expert in equine business practices and Arabian Horse Valuation in various courts, including the United States Tax Court. His expertise regarding tax conflicts specific to the horse industry has made him a sought after attorney, speaker and teacher. He’s spoken and lectured for the American Horse Council, the Colorado State University and the California Polytechnic University in Pomona. Even the equine publications got into the act and talked him into contributing articles on the "Hobby Loss" issue as regarding horse operations, charitable contributions of horses, partnerships and syndications, legal aspects of transported semen, and how to land a profit in the horse business. In short, as the legal voice of the Arabian horse industry, Paul Husband has truly made his mark

"I have a special affinity for horse owners," Paul says, "because I am a horse owner. Every horse breeding and training operation has its own, special story to tell. The key to presenting information about a horse farm to a Tax Court is in the storytelling. First, you have to be able to properly look into the background of a horse farm and understand their particular situation. Each farm has its strengths and weaknesses. Some have outstanding bloodstock; some have made their name in the show ring or on the racetrack. Some farms show their mettle by being run efficiently, and some do very well in the difficult arena of marketing horses. I like to arrange the legal presentation so that the strengths of the horse operation are immediately obvious to the court. Once, after several appeals, I even got an IRS Appeals Officer to come out and see a farm. At first glance the case had looked like a doctor was trying to write off his daughter’s expensive hobby. But when the Appeals Officer saw the operation, how efficiently it was run, and how down-to-earth and business-like the farm functioned, he ruled in their favor. Cases like that are infrequent, but what is important remains constant — reading the situation at the farm and at the IRS accurately … and portraying it in the right order, as well as the right light."

When Paul Husband played football, he knew all of the plays by heart. As a lawyer he works with the same efficiency. He never enters a courtroom with a single plan. There’s always a contingency Plan B, and C and even D. If necessary, he’s always ready to change his approach. When it comes to expert advice on defending the IRS "Hobby Loss Challenges" or legal information regarding Stallion Syndications, there’s no one more knowledgeable.

"Hobby Loss cases in the horse industry have become much more frequent of late," Paul notes. "The IRS has been laying low for the past two or three years, getting reorganized. But now, because of the poor state of the economy, the country needs more money and, consequently, the number of IRS audits has suddenly gone through the roof. It’s really not a question of ‘if’ your horse farm will get audited, it’s more like ‘when.’ The IRS deals a ‘one-two punch’ using the ‘Passive Activity Loss’ rules as a backup to the ‘Hobby Loss’ rules. The key to defending against the second problem, the ‘Passive Activity Loss’ rules, revolves around the 500-hour test. If a couple running a horse farm can prove they have invested 500 hours or more of work per year (between the two of them), they will generally be regarded as ‘active’ participants. By the way, a spouse’s working hours count — the children’s do not. I wish I’d known that when I was a kid cleaning stalls for my dad.

You also have to watch out for employment taxes. Many farm owners try to pay their grooms as independent contractors. It doesn’t work. Trainers, however, can be compensated either as an employee or as an independent contractor, depending on the circumstances."

Is it possible? Will horses soon be hiring their own press cadre and signing multi-million dollar contracts with motion picture moguls? You can bet your cinch strap that when it happens, unabashed Arabian horse lover and equine attorney Paul Husband will be there helping them to get their hoofprints on the bottom line.

Paul Husband has been a lawyer since 1977, with his own firm since 1981. _His practice includes taxation law, tax litigation, equine law and entertainment law. Paul’s current offices are in Universal City, California.