How To Ranch Like Tom Cruise On A Lower Budget

Jan 1 2014, 12:05pm CST | by

How To Ranch Like Tom Cruise On A Lower Budget
Photo Credit: Forbes Business

Not everybody can be Tom Cruise, but even without taking up Scientology, there are ways of participating in the Tom Cruise experience.  For example, it was reported that Tom Cruise was paying $400 in property tax on an $18 million getaway ranch in Colorado.  The great property tax deal was courtesy of Colorado’s generous agricultural exemptions and a few sheep who kept the grass short.  Here is a story on Farmer Tom by my blogging buddy, Kay Bell.  Storm Mountain Ranch was designed to share the gentleman gentlelady ranching experience with those a bit down the economic ladder from Tom Cruise.

Storm Mountain Ranch describes itself as “ a fully established, private, gated ranch community, located less than 10 minutes east of Steamboat Springs, Colorado. The ranch is a conservation development on approximately 1100 acres with only 14 Homeowners.” Storm Mountain took the agricultural exemption a little further, asserting that the residences were integral to agricultural operations much like the ranch house on the Ponderaso where Ben Cartwright issued orders to Hoss and Little Joe.

The county assessors for Routt County saw it differently which brought the matter before the Colorado Board of Assessment Appeals (Sorry have not found a free link.)   The property had previously been considered agricultural, but the assessors thought that House Bill 11-146 which calls for carving up to two acres of land on which a “residential improvement” is located  out of the agriculturally exempt land unless the improvement is “integral to an agricultural operation”.

The argument about whether the residences were integral to the operation of the ranch was all about what the residents were doing, since apparently nobody was keeping a horse or a tractor in their garage.  The discussion reminded me a lot of the type of discussion you will see in passive activity and hobby loss cases. Storm Mountain’s argument was, in part, that since the agricultural operation was not leased out, but rather run by the Homeowners Association, each of the homeowners, by virtue of membership and dues paying was participating in agricultural operations.  There was more to it than that.

Petitioners serve on HOA committees and participate in quarterly HOA meetings where decisions regarding the agriculture program, budgeting, capital improvements, equipment, and water rights are discussed. The HOA Board oversees the SMR employees. Petitioners also participate in informal meetings at the ranch addressing agriculture program issues. These informal meetings can occur as owners encounter each other or the ranch manager on the road and stop to talk; as they meet each other elsewhere on the ranch property, and at social gatherings. All Petitioners who appeared testified that they spray weeds and are involved in creek and ditch maintenance on their individual lots that support the SMR agriculture program.

The assessor saw it differently.

The attendance charts show that some Petitioners are regular participants, some are occasional participants, and some rarely participate. The witness concluded that Petitioners are several steps removed from the agriculture operation on their lots because of the HOA, the full-time SMR staff, and the agricultural program leases. The witness also concluded that the activities of the individual Petitioners do not meet the statutory requirements to qualify them as integral to the agriculture operation on their lots.

The Board went with the assessor further noting that some of the activity like weed killing was being done more in their capacity as homeowners than in support of the agricultural operation.

Even though, the assessor won on the primary issue, that the residential portion of the lots were not integral to the agricultural operation, the overall decision was for the most part in favor of the homeowners.  The “residential envelope” for each homeowner was one acre.  The rest of their acreage (either 34 or 69 acres) maintains its agricultural classification.  The assessor argued that most of the value of the entire parcel should go to the residential acres, which gave them each a valuation of $1,430,000.  The Board ruled that an acre is an acre and the acre with the house on it was no different than any of the others which ended up with a valuation of $60,000 per lot.

So it would seem that a condominium style version of the Tom Cruise getaway experience, complete with bargain real estate taxes, is still available to the not quite 1% among us.

You can follow me on twitter @peterreillycpa.

Source: Forbes Business


Don't miss ...


<a href="/latest_stories/all/all/30" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.


blog comments powered by Disqus

Latest stories

Bhopal fugitive Warren Anderson is dead (Roundup, Changing dateline)
Washington, Oct 31 (IANS) Warren Anderson, the former CEO of Union Carbide Corp, has died at 92 after living for 30 years under the shadow of the 1984 Bhopal gas tragedy that killed thousands.
Sit-ins delayed building powerhouses: Nawaz Sharif
Islamabad, Oct 31 (IANS) Prime Minister Nawaz Sharif Friday blamed sit-ins for delaying the construction of powerhouses in the country, as cricketer-turned-politician Imran Khan continued protesting with supporters in the capital city for over two months.
Britain to repay part of First World War debt
London, Oct 31 (IANS) British Chancellor of the Exchequer George Osborne Friday announced that the British government will pay off part of the country's First World War debt as part of the redemption of bonds stretching as far back as the 18th century.
UN-Habitat presents the first World Cities Day
Shanghai, Oct 31 (IANS/EFE) The UN Human Settlements Programme (UN-Habitat), headed by former Barcelona mayor Joan Clos, Friday launched its first World Cities Day in China, to be held every Oct 31 to promote sustainable development.

Latest from the Network

Apple Outsmarts Samsung in Terms of Revenue Generation
Samsung can sell more products, but it doesn’t mean that it will earn more profit, as Apple overtakes the Korean giant with respect to the earnings.According to the Cult of Mac, Samsung earned a profit of $3.8 billion...
Read more on Apple Balla
Apple Declares Not to Remove PCalc iOS Calculator Widget
The PCalc iOs calculator widget is free from the risk of being removed, as Apple decides not to drop it from the App Store.According to Tech Crunch, the officials of Apple have confirmed about the move, stating that it...
Read more on Apple Balla
Seth Rogen to Act as Steve Wozniak in the Steve Jobs’ Movie
Seth Rogen has got an important role in the biopic of the late Apple co-founder Steve Jobs, as he has been selected to play as Steve Wozniak.According to the Variety, Rogen will be advised directly by Steve Wozniak, the...
Read more on Apple Balla
Ponzy schemer cheats residents of $22 mn, gets 15-year jail
Washington, Oct 31 (IANS) If you have been one of those approached by some 'known' person for investing in something with an assurance of 'easy money', you may benefit reading about this Ponzi schemer jailed in the US...
Read more on Politics Balla
Burkina Faso's president quits, army chief takes power (Roundup)
Ouagadougou, Oct 31 (IANS) Burkina Faso's army chief Gen. Nabere Honore Traore assumed power Friday after President Blaise Compaore announced his resignation following violent protests against his attempt to extend...
Read more on Politics Balla
Spanish government challenges Catalonia's symbolic vote on independence
Madrid, Oct 31 (IANS/EFE) Spain's government Friday challenged Catalonia's decision to hold a symbolic vote Nov 9 as an alternative to a referendum on independence stalled by the Constitutional Court. The government...
Read more on Politics Balla
Myanmar roundtable summit discusses political issues
Nay Pyi Taw, Oct 31 (IANS) Myanmar's first five-party roundtable summit held in the Presidential Palace here Friday discussed some key political issues in the country, presidential spokesman U Ye Htut said at a press...
Read more on Politics Balla
Jake Gyllenhaal saves outrageous clothes for Halloween
Jake Gyllenhaal always wears his ''sl***iest outfit'' every Halloween. The 33-year-old actor has revealed his dad, director Stephen Gyllenhaal, is ''obsessed'' with Halloween and throughout his childhood Jake and his...
Read more on Celebrity Balla
Katie Holmes would tell her younger self to 'relax'
Katie Holmes would tell her younger self to ''relax''. The 35-year-old actress, who has eight-year-old daughter Suri with ex-husband Tom Cruise, claims she never believed she could carve out a career in Hollywood while...
Read more on Celebrity Balla
Joshua Jackson calls Diane Kruger his wife
Joshua Jackson calls Diane Kruger his wife. The 'Affair' star, who previously admitted he and his German girlfriend of eight years are unlikely to ever marry, doesn't like referring to the blonde beauty as his...
Read more on Celebrity Balla