Transterrestrial Musings

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OK, how do you sell land twice? I want in on that action!

Posted by David Summers at October 13, 2006 08:38 AM

A quick correction: in '01, he didn't sell it. The property was transferred to an LLC, which is a common way to own investment property. It shields you from tort liability and profits are passed directly to the owners' tax returns, much like a sole proprietorship or an S-corp.

That aspect of the deal is not unusual or sleazy.

Posted by ech at October 13, 2006 08:39 AM

BREAKING NEWS

Updated: 10 minutes ago
WASHINGTON - Rep. Bob Ney pleaded guilty Friday to bribery charges stemming from the Jack Abramoff influence-peddling investigation.

The Ohio Republican was the first member of Congress convicted in the scandal that has tainted the White House as well as Capitol Hill. He faces up to 10 years in prison.

Ney confessed his wrongdoing before U.S. District Judge Ellen S. Huvelle in a federal courthouse a few blocks distant from the Capitol, where until recently he wielded a chairman's gavel.

Posted by Anon at October 13, 2006 09:29 AM

Anon,

Do you have reading comprehension problem?

Don't answer, that was rehotrical.

Posted by Mike Puckett at October 13, 2006 09:48 AM

Harry Greed...lol!

The news is saying he could do jail time for this.

Posted by Mike Puckett at October 13, 2006 10:02 AM

Sorry ECH he did sell it, by his own admission.

The corporation that bought the land listed it as its most valuable asset. If he did not sell it then the corporation committed fraud.

Any which way you slice it, if any of us who actually own a corporation had done this, we would be spending time in prison.

Dennis

Posted by Dennis Ray Wingo at October 13, 2006 11:08 AM

Mike Puckett,
Do you have a "rehotrical" ? Is that something you stick up your rear ventricle?

Posted by Anon at October 13, 2006 12:48 PM

It's not illegal to structure a deal to minimize the
tax consequences, the key is the deal has to
have some economic existence.

Frankly it sounds like it meets this minimum test.

Reid owns land, His buddy owns land,
They form an LLC and combine this.
Reid pays the land taxes from his personal acct (A mistake)
Reid does not report the LLC on his financial forms(Mistake2)

LLC sells land, profits are distributed.

Now sounds like he's got some tax returns to amend
and to rebate some funds,
otherwise it seems legal.

Posted by anonymous at October 13, 2006 07:02 PM

"Mike Puckett,
Do you have a "rehotrical" ? Is that something you stick up your rear ventricle?"

What's a ventricle and how are you able to post with you head so firmly embedded within?

Enquiring minds want to know.

Posted by Mike Puckett at October 13, 2006 07:38 PM

anon

Well and good but that is not what Reid did. He continued to claim that he owned the land even though title had been transferred to the LLC. (See the land title documents that are on the smoking gun and other sites).

The question is; when he sold the land, did he pay the 35% corporate tax rate, which is what the LLC should have done and then Reid would have to pay his 28% personal income tax on the distribution to him as personal income. If he only paid the 15% capital tax gain rate at the time as if he sold it as a piece of personal property, then he has committed fraud on the IRS. That is why his income tax returns, the 1040 schedule D (Capital gains) and schedule C (outside income) needs to be looked at.

It would be stupid to put together a deal where he has to pay taxes twice but that does seem to be the case. The title office in Las Vegas lists the title of the land in the name of the LLC from 2001 through its sale in 04. If this was used to inflate the value of the LLC and it was still his personal property (why else would he continue to pay the property taxes out of his own pocket?) and dodge the ownership issue then he committed fraud to the agencies that were considering the rezoning.

This stinks all around.

I have friends that I have known for 35 years and at least one friend of mine that I have known for decades is wealthy and there is no way that we would do something like this with no paper trail.

Dennis

Posted by Dennis Ray Wingo at October 13, 2006 08:44 PM

Uh, Cunningham and Ney have both been found guilty this year. There seems to have been stunning silence on this board about the congressmen who have _already_ been convicted.

Posted by Tim Barnes at October 14, 2006 04:23 PM

a) This is not a "board."

b) I'm glad that corrupt Republicans who are criminals have been indicted and (if guilty) convicted.

Do you have any more moronic comments?

Posted by Rand Simberg at October 14, 2006 06:23 PM

Actually the fact that these two guys have been found guilty speaks well of the Republican party. Both of these guys demonstrably did wrong, were convicted and were or will be tossed from Congress.

When Dingy Harry does something demonstrably illegal, the entire democratic caucus comes to his defense. The same thing with Jefferson, who was caught with FBI cash in his freezer. They started crying constituional foul there when clearly this was within both the letter and intent of the law shielding congresspersons from UNNECESSARY harrasment from the law. Taking 5 figure bribes is not covered.

Any more brilliant comments?

Dennis

Posted by Dennis Ray Wingo at October 14, 2006 06:59 PM

Rand,

What is it with moonbats and reading comprehension? Do they not understand who Harry Reed is and that he is the subject of this post?

Do they understand that this is your and not 'their' board and they do not get to pick and chose the subject matter?

What is it with the looney left and simple concepts like these?

Perhpas they are so emotionally stunted in their world veiw that they think the entire universe exists to serve their every childish whim.

Posted by Mike Puckett at October 14, 2006 09:03 PM

"Do you have any more moronic comments?"

An observation: you only care when Democrats are accused of wrongdoing. You keep silent when Republicans are accused of wrongdoing.

Posted by Tim Barnes at October 15, 2006 07:46 AM

You keep silent when Republicans are accused of wrongdoing.

This is utter nonsense, as any long-time reader of this blog knows. If I make more of a point recently when Dems are accused of wrongdoing, it's simply to point out their hypocrisy. It hasn't been the Republicans running around bleating about a "culture of corruption."

If you're whining becuse I saw no need to make a big deal about Foley, it's because, unlike most Dems in similar circumstances (e.g., the late Gerry Studds), he did the right thing and resigned immediately. Had he not, I'd have come down on him with both feet. I'm not a Republican, and I'm not a defender of Republicans (except when the accusations against them are baseless and/or hypocritical).

Posted by Rand Simberg at October 15, 2006 07:55 AM

Rand

I find it interesting that at the earilest possible moment that ardent dem defenders go for personal invective. Why is this so? I think that your post from Peggy Noonan hit that one on the head.

The long term problem that this creates is that there is a hardening of opinion that is not going to be easy to break through. This is what eventually led to the war between the states. It has always been said that the USA would never be defeated by external enemies, only by internal division.

Dennis

Posted by Dennis Ray Wingo at October 15, 2006 10:50 AM

Simberg just likes stooging for the GOP because
they support his neocon agenda.

As for Wingo, I think he's dead wrong on the tax deal for Reid.

Reid buys land for $400K.
Reid sells land for $400K, (No tax due, except clark county transfer tax)
Reid is given a share in the New LLC, sounds alot like a 1031
transfer, or other like kind exchange.

LLC sells land later, for $1 Million. Taxes now due on the
gain of $600K.

Now wether this is taxable at the personal capital gains rate
or the corporate tax rate, well that's a tighter question.

Posted by anonymous at October 16, 2006 06:41 PM

Batpucky

First Reid said that he sold it, then that he did not, that he just TRANSFERRED the title. In any lawbook that is not a sale. I know that this is different than what he originally claimed and could possibly be that he gained shares in the LLC valued at $400k. This is also odd in that the LLC claimed that the land transferred by Reid was 75% of the LLC net value but what the heck.

Now when he sold, it was at $1.1M dollars. The only way that he could have gotten away from paying the 35% corporate tax rate was if this was a personal sale, which it was not (at least according to him now, he originally said that it was). This is even more interesting that he paid the land taxes out of his own pocket, and not through the LLC. Why is this? This is a patently stupid way of doing business as you don't get any tax benefit for doing this, EXCEPT if he was carrying two sets of books, one personal and one corporate.

Bottom line is that he has to pay the 35% on the $700k gain at 35% rate or $210k. If it was at the personal capital gains rate it would have been $90k for a difference of $120k.

Reid originally claimed that it was personal, then corporate. Which is it? Only his income tax return knows for sure. Schedule D or Schedule C? One is Fraud, the other is just stupid. I cannot belive that he is just stupid.

I worked in Vegas in 2004 and know the area. If there was a lot of rezoning that drove the value of that land up and he was putting the land in the LLC (which the court records that he did) to cover up the fact of his ownership, then this could be fraud as well.

Dennis

Posted by Dennis Wingo at October 19, 2006 12:09 PM

"The same thing with Jefferson, who was caught with FBI cash in his freezer. They started crying constituional foul there when clearly this was within both the letter and intent of the law shielding congresspersons from UNNECESSARY harrasment from the law. Taking 5 figure bribes is not covered."

i saw plenty of democrats speak out against jefferson (in fact ive never seen a single democrat or liberal speak in favor of him, they either ignore it or denounce it. the same cannot be said of republicans when it comes to tom delay and others). im not sure if any were congressmen, but if i recall correctly the republicans in congress wanted congress to be shielded also.

Posted by at October 19, 2006 05:12 PM

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