-22-
Camp project was named "The Villages of Seminole Forest". Union
Camp announced the project on July 26, 1990.
Around December 31, 1990, petitioner bought 1,799.7 acres of
land from Union Camp (the Union Camp property) for $2,249,625 in
cash, of which $1,200,000 came from petitioner's fund in the
Super Trust. The Union Camp property adjoined petitioner's land
and increased petitioner's land holdings to about 9,500 acres.
In 1993, Union Camp announced that it would not develop The
Villages of Seminole Forest, and petitioner dropped its plans to
develop its property contiguous to the Union Camp property.
4. Insurance
a. Herd Insurance
Petitioner carried no commercial insurance on its herd in
the years in issue. Most dairy farmers do not commercially
insure their herds because it is too expensive.
Petitioner estimated how much it needed for a reserve by
subtracting the expected salvage price from the replacement cost
for its herd of 6,000 cows. Petitioner assumed that its
replacement cost would be $950 per cow in 1987, and $1,050 in
1988 and 1989. Petitioner increased the self-insurance reserve
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