Well, got a call about 6:00 my time, 7:00 Texas time from my brother who had spent the afternoon with an auditor for the IRS. Now to explain the predicament we find ourselves in, a little background is called for. This is going to be a long post.
Now I want you to understand that just in case any of you viewers might work for the IRS, the following description is all hypothetical. Nope, not real, just a figment of my imagination. Just a story.
Back in the early 1990's, my next oldest brother owned one of the biggest oil field supplies companies around Houston and he had raised this company from a pup, borrowing from those of us in the family that were gainfully employed to get it going. Well, around 2006, he decided to sell out and retire and successfully sold out on a 25 year buyout to a couple of guys that wanted the company and had the front money.
In the meantime, one of his biggest customers and a guy he played Golf with, whom we'll call James, owned about a gazillion acres down in SW Texas that was primarily leased out to tenant farmers. James had inherited the land from his father, who had come back from the Alaskan Gold Fields with absolutely nothing in his pockets, except about ¾ of a million dollars he had swindled out of other miners in Alaska. (Sold the same mining claim to 5 different people just before he left, I heard, among other things) Anyway, liking the country SW of San Antonio, he purchased who knows how many gazillion acres of land and had it cleared and subdivided into plots of between 200 and 600 acres and share cropped or leased it out to tenants. Some of these tenant families have been on this land for the last 75 or so years.
Well, right in the middle of this gazillion acres is a small hill about 120' above the surrounding country that had an old ranch house on it and it consisted of between 400 – 600 acres of thick, thick brush with about an 1-1/2 acre pond right in the center of it. Anyway, we, my brother and I were free to hunt this land and if the tenants were having problems with hogs, their land, all we wanted for Hogs. Hogs only! The Whitetails were reserved for James and his 3 snobbish sons, who were too good to hunt hogs unless they stumbled across one while deer hunting. So about 2-3 times a year we would go to Texas and clean out the hogs. While we were there, we'd also fix things that were falling apart, which James would pay for, but we'd make sure they got repaired or upgraded just to help him out and for letting us hunt the property.
Ok, now about late 2008 I was preparing to retire, and my brother was getting bored with nothing to do since everyone he knew was still working so he called and asked if I wanted to form a Family Corporation and do something together. OK, I was willing, so after talking it over, we decided to form an exterminating company. We figured, we could not only put my brothers grandson to work, but we could write off everything we did down in SW Texas as a business expense, since the tenants would call James and he'd call my brother and off we'd go! Meanwhile the company I worked for hadn't been able to find anyone to replace me, asked me if I would stay a couple more years and that they would make it worth my time, which they did. In the meantime, it worked out that James would ask if anything needed repair, write a check to the exterminating company and we'd see that it got fixed, and get in some hog hunting, all as a write off against profits. Worked like a charm! For example, we told James the roof on the old ranch house was leaking, he wrote a check for $346,000.00, we had the old cabin burnt down by the local Fire Department who loved the experience, and had a new 6 bedroom cedar lodge built. James wrote it off somehow, we wrote off mileage, costs, ammo, food, etc and everyone was happy. Especially since we could write of things like a Springfield M1A Super Match custom, a 7 mm Mag custom build by a local custom builder and some other necessary items under the heading of exterminating equipment.
Well, unbeknownst to ME, (my brother knew, but didn't think it through) James liked what we did so much for his property that in early 2013 he had incorporated into his legal paperwork somehow, a Hunting Estate for Life, for me, my brother and our families. I'd never heard of this before tonight. Didn't even know it was possible to do it. I guess, money talks.
NOW according to the IRS, this makes us a partial Property owner for life, and WE can't do business to our own property, and write it off! They are disallowing all write offs related to the exterminating service in SW Texas for 2013. In fact, my brother said that the Auditor said
" I wish that this had happened a few years ago, because with some of these write offs, I would have bought the fiction rights to this story. Unfortunately, the movie Fantasia has already been made".
I'll bet he rehearsed that for quite a while!
What it boils down to is they want us to pay for our own hog exterminating toys, and that just ain't the American Way!!!!!!!
Right now got a lot in common with a pig with laryngitis, were both disgruntled……I got to see a lawyer tomorrow.
Packrat
