Posted on 08/13/2006 12:54:38 PM PDT by calcowgirl
When U.S. Rep. Gary Miller (R-Diamond Bar) sold 165 acres to the city of Monrovia in 2002, he made a profit of more than $10 million, according to a financial disclosure form he filed in Congress. Ordinarily, he would have had to pay state and federal taxes of up to 31% on that profit.
Instead, Miller told the Internal Revenue Service and the state that Monrovia had forced him to sell the property under threat of eminent domain. That allowed him to shelter the profits from capital gains taxes for more than two years before he had to reinvest the money.
But there is a problem with Miller's claim: Monrovia officials say that Miller sold the land willingly and that they didn't threaten to force him to sell.
Miller, whose 42nd Congressional District includes chunks of Los Angeles, Orange and San Bernardino counties, claimed the same exemption in two subsequent Fontana property transactions, allowing him to continue sheltering his profits from the Monrovia sale. And in each of those cases, the purchasers say eminent domain, which allows a government agency to force a sale if it's in the public interest, was neither used nor threatened.
Internal Revenue Code Section 1033 was designed to protect people whose land is condemned by government agencies or destroyed in natural disasters. Other investors wishing to postpone capital gains taxes would have to follow complicated rules that include reinvesting the entire amount in other property within 180 days. ...
--snip
Glen Owens, a member of Monrovia's Planning Commission, said the city could not have used eminent domain to purchase Miller's property, because it was acquiring the undeveloped hillside land for a wilderness preserve using state funding that specifically prohibited forced sales.
(Excerpt) Read more at latimes.com ...
Lots of interesting machinations in this article. It's worth a full read.
If you are forced to sell land by government, the sale SHOULD be tax free.
good idea.
I might agree with you if someone held the land for 10 or 20 years. Instead, we are seeing a flurry of ownership changes shortly before the property is purchased with our taxpayer money, and our "representatives" often being on the receiving end.
Any request from a government to purchase property carries with it an implied threat of eminent domain.
Prop 90
BumP.
Stop Eminent Domain Abuse.
2 earlier posts re; land deals
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Another L.A. Times Unfounded Slur on a Republican Politician
http://www.freerepublic.com/focus/f-news/1683172/posts
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Official's Tax Break: on Firm Ground? (Eminent Domain claimed for tax benefits)
http://www.freerepublic.com/focus/f-news/1682989/posts
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