Rich and getting richer as Forbes play tax games with family ranch

The latest instalment of one of the world's glitziest estate sales is about to unfold at the Colorado ranch of the late publishing magnate, Malcolm Forbes.

His children plan to raise US$70 million ($101.8 million) by selling access to the ranch so capitalists can commune with black bears, coyotes and mountain lions.

The Forbes siblings have given up their right to develop about half the ranch's 69,363 hectares near Fort Garland, Colorado, qualifying for conservation-land tax breaks.

Documents filed with the US Securities and Exchange Commission show they have also created a company, Forbes Trinchera Ranch, to sell stakes granting ranch access.

The easement lets multi-millionaires build 930 square-metre mansions that can serve as base camps for hunting elk and bighorn sheep. The family, while managing an estimated US$1 billion inheritance, join western landowners in using conservation easements to cut taxes as land values soar.

"They are using the tax code and the land for all the benefit they can get," says local real estate agent Bruce Steffens, of Monte Vista, Colorado. "That is just smart."

Christopher "Kip" Forbes, 54, vice-chairman of Forbes, a closely held New York publisher, will manage the new limited liability company, whose other principals are his sister, Moira Mumma, and his brothers, Tim, 52, Robert, 56, and Steve, 58 (Forbes magazine's editor-in-chief and a former Republican candidate for the US presidency who advocated lower taxes).

The company says it will raise as much as US$70 million by selling private shares, letting stakeholders become partners in one of the largest ranches in Colorado.

The ranch already has a lodge with 25 suites, which the Forbes family promote as a corporate retreat and luxury accommodation for hunters. The Colorado Department of Wildlife supplies Trinchera with hunting licences for elk and bighorn sheep that it can resell to guests.

The Forbes conservation easement, which covers about 32,780 hectares at the Trinchera ranch, permits the construction of 17 single-family residences as large as 930sq m.

The land itself cannot be sold to others as the conservation easement bars subdivision.

The new Trinchera ranch company represents the latest step by the Forbes family to take advantage of the business publications, real estate and artwork that Malcolm Forbes left behind when he died in 1990 at 70.

In February 2004, the family sold nine Faberge Imperial Easter Eggs, collectively valued at US$70 million to US$100 million, to Russian billionaire Viktor Vekselberg.

Forbes paid US$45,000 to US$1.86 million an egg for most of the collection in the 1960s and 1970s.

The easement lets the Forbes family reduce their income taxes, which may be an issue after they sold the eggs at an appreciated value.

The Colorado ranch was one of several trophy properties that Malcolm Forbes acquired in amassing an inheritance of as much as US$1.23 billion, says a Forbes biography, The Man Who Had Everything. He also bought the Pacific island of Laucala in Fiji.

- BLOOMBERG