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5. Purchased Wood
Another business activity petitioner engaged in involved
logs that petitioner purchased and then resold. Petitioner had
no involvement in the cutting of the logs under this business
activity. Petitioner purchased the cut logs from an unrelated
entity. The unrelated entity delivered the logs to mills
petitioner designated. The mills purchased the logs from
petitioner under an existing contract petitioner had with the
mill. The mill paid petitioner for the logs. Petitioner then
paid the unrelated entity for the logs, at a price less than what
the mill paid petitioner.
6. Petitioner’s Estimated Costs From Its Business
Activities
The parties stipulated the following:
Because of the scope of petitioner’s activities
and the entrepreneurial nature of the industry, it is
impossible to describe a single business model.
Further, the extent of petitioner’s activities * * *
will vary from year [to year] and involve many unique
transactions.
Petitioner estimates the direct costs associated with the
various business activities as follows:
Business Activity FYE 1995 FYE 1996 FYE 1997
Trees from petitioner’s land $12,333,559$12,136,789 $9,050,143
Trees from related party land 24,667,11824,273,578 22,647,858
Trees from unrelated party land 12,333,55912,136,789 13,588,715
Subtotal 49,334,236 48,547,156 45,286,716
Purchased wood 23,099,969 18,079,103 28,757,169
Total 72,434,205 66,626,259 74,043,885
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Last modified: May 25, 2011