Oct 13 2006
strong>Update: Reader SBD has lots more on Reid at this location – check it out. - End Update
Hugh Hewitt is just ripping up the drive-by media by giving them a “Journalism for Dummies: Shady Land Deals” tutorial on what to look for Reid’s land-scam. One item of note is this question that may now be answered:
When Senator Reid and his wife sold the property to Patrick Lane LLC in which he received an interest in return, did he receive any cash at the same time, or any time that year, in partial consideration for his sale of the land to the partnership?
Reid reported that he sold a piece of property and a 47 percent interest in an adjoining piece of land in January 2004 for a price that he reported as between $1 million and $5 million.
Clark County records indicate that Reid was involved in a sale completed in January 2004 of 4.73 acres on Patrick Lane just west of Fort Apache Road, south of Spring Valley. Records show the buyer was Patrick Lane LLC, whose manager was listed as Jay Brown, an attorney and longtime Reid friend and associate.
Records available Friday did not indicate sales prices. Reid declined through a spokeswoman to detail the transaction or verify the county information.
Reidâ€™s profits from the transaction were reinvested in a Wells Fargo money market fund and in bond offerings, his aide confirmed from his financial report.
Now legally, any additional value from this point on ($400K was the final sale price) would be in Park Lane LLC, not to the Reid’s directly. But interestingly enough, Reid did record how much the property SHOULD be worth since the rezoning that took place only days prior to the sale of the property! Did Harry Reid tip his hand? If he sold it for $400K why list its value for what would be the selling price two years later? Hugh’s complete overview of this rocketing scandal is here, and it doesn’t look too good for Sen Reid. He was not very good at hiding what was going on, and his excuses are even worse. Polipundit noted this comment at Hewitt’s site, which clearly shows why the sale and the second payment of $1.1M is not legal and will not be shoved under the rug.
I only caught a piece of the segment on this, but it sounded like he received his cash back almost immediately. This is a bad fact if so. The IRS has some really awful rules to recharacterize this as a sale transaction if he received a cash distribution that, when looked together with the contribution of the land, is more properly characterized as a sale of the property. These are referred to as the disguised sale rules and reside in IRC Section 707(b) and the regulation thereunder.
Read the whole thing, but it implies a level of ignorance that doesn’t fit with Reid’s history. A US Senator can afford better real estate and tax attorney advice than what the evidence is exposing happened with this deal. Heck, I could get better advice from H&R Block than what we see in this scandal. This was not an innocent mistake. The number of land deals Reid has transacted means he is experienced in this, and knew better. Therefore the “naive innocent” excuse will not hold.