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August 31, 1992, in the amounts of $2,717 and $3,120,
respectively.
The sole issue is whether section 274(a)(1)(B) disallows
deductions for payments incurred in leasing property used for
hunting game.
FINDINGS OF FACT
On Shore Quality Control Specialist, Inc. (petitioner or On
Shore) is an oil and gas pipeline inspection company. Eddie H.
Hooks, Jr. (Mr. Hooks) was the president of On Shore during the
years at issue. At the time of filing the petition, petitioner's
principal place of business was Austin, Texas.
Robert C. Carr (Mr. Carr) leased a 1,700-acre ranch (the
ranch) from Texas A&M University located west of Austin, Texas,
in the so-called Hill Country. Mr. Carr raised cattle on the
ranch. The lease entitled Mr. Carr to sublet the ranch for
cattle grazing or hunting. In 1979, petitioner, through its
agent, entered into an oral agreement (the hunting lease) with
Mr. Carr under which petitioner received the right to hunt on the
ranch. The lease has been renewed yearly, or more precisely,
from hunting season to hunting season. The property includes a
cabin that petitioner used. Petitioner invited business
customers to go hunting on the property.
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