Comments on: The Harry Reid Hang-Up http://www.floppingaces.net/2006/10/12/the-harry-reid-hang-up/ Sun, 08 Nov 2009 13:25:44 -0800 http://wordpress.org/?v=2.8.5 hourly 1 By: Curt http://www.floppingaces.net/2006/10/12/the-harry-reid-hang-up/#comment-1751 Curt Fri, 01 Dec 2006 21:23:00 +0000 http://www.floppingaces.net/2006/10/12/the-harry-reid-hang-up/#comment-1751 <a href="http://www.washingtonpost.com/wp-dyn/content/article/2006/10/12/AR2006101200129_2.html" rel="nofollow">Hmmmm</a>: <blockquote><strong>Senate ethics rules require lawmakers to disclose on their annual ethics report all transactions involving investment properties _ regardless of profit or loss _ and to report any ownership stake in companies.</strong> Kent Cooper, a former Federal Election Commission official who oversaw government disclosure reports for federal candidates for two decades, said <strong>Reid's failure to report the 2001 sale and his ties to Brown's company violated Senate rules.</strong></blockquote> So I may have mis-spoke when I said tax reportable, I was referring to the senate, not the IRS. Recall that I was answering your first comment which said I was not telling the truth with this statement: <blockquote>Harry gets a profit and fails to notify the Senate.</blockquote> Tell me again why this should not have been disclosed to the Senate? I bow to your prowess david, I am in awe.... :laugh4: Oh btw....a REAL CPA <a href="http://hughhewitt.townhall.com/g/be30dc6c-d864-45bd-9fbf-e2766517398c?comments=true#commentAnchor" rel="nofollow">emailed Hugh Hewitt</a> with this comment: <blockquote>Harry Reid's transaction was done, obviously, to hide his ownership in the underlying land. His indirect ownership of the land after his contribution to the LLC should have been disclosed. His initial contribution of the land to the LLC in exchange for an LLC interest is non taxable under IRC section 721. He should have received a capital account in the partnership equal to the fair market value of the land. This is required under the capital account maintenance rules of IRC section 704(b). If this fair market value is in excess of the cost of the land, this too is not taxable. The tax rules would require any pre contribution gain, ie, the fair market value increment in excess of his basis, to be allocated to him under IRC section 704(c). 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. There is a presumption that any distribution of cash to a partner within two years of a property contribution is part of a disguised sale and requires disclosure and rebuttal on a tax return if it is not treated as such by the partnership and the partner. This could be a significant tax issue to Mr. Reid if he did not recognize a gain on this. The only way it would not be taxable is if he completely liquidated his LLC interest for cash equal to his basis in the land. <strong>If he retains any interest in the LLC, then he has a taxable gain.</strong></blockquote> Hmmmm:

Senate ethics rules require lawmakers to disclose on their annual ethics report all transactions involving investment properties _ regardless of profit or loss _ and to report any ownership stake in companies.

Kent Cooper, a former Federal Election Commission official who oversaw government disclosure reports for federal candidates for two decades, said Reid’s failure to report the 2001 sale and his ties to Brown’s company violated Senate rules.

So I may have mis-spoke when I said tax reportable, I was referring to the senate, not the IRS. Recall that I was answering your first comment which said I was not telling the truth with this statement:

Harry gets a profit and fails to notify the Senate.

Tell me again why this should not have been disclosed to the Senate?

I bow to your prowess david, I am in awe….

:laugh4:

Oh btw….a REAL CPA emailed Hugh Hewitt with this comment:

Harry Reid’s transaction was done, obviously, to hide his ownership in the underlying land. His indirect ownership of the land after his contribution to the LLC should have been disclosed. His initial contribution of the land to the LLC in exchange for an LLC interest is non taxable under IRC section 721. He should have received a capital account in the partnership equal to the fair market value of the land. This is required under the capital account maintenance rules of IRC section 704(b). If this fair market value is in excess of the cost of the land, this too is not taxable. The tax rules would require any pre contribution gain, ie, the fair market value increment in excess of his basis, to be allocated to him under IRC section 704(c).

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. There is a presumption that any distribution of cash to a partner within two years of a property contribution is part of a disguised sale and requires disclosure and rebuttal on a tax return if it is not treated as such by the partnership and the partner. This could be a significant tax issue to Mr. Reid if he did not recognize a gain on this. The only way it would not be taxable is if he completely liquidated his LLC interest for cash equal to his basis in the land. If he retains any interest in the LLC, then he has a taxable gain.

]]> By: david http://www.floppingaces.net/2006/10/12/the-harry-reid-hang-up/#comment-1752 david Fri, 01 Dec 2006 21:23:00 +0000 http://www.floppingaces.net/2006/10/12/the-harry-reid-hang-up/#comment-1752 Curt, When you say, "He sold the land to the LLC for interest in that company, this is definately a reportable taxable event. He didn't report it and he made money off of it…" you are absolutely and completely incorrect. This is not a matter of opinion. Why are you climbing out on this limb? This is a specialized area of knowledge, one in which you clearly are not versed. Don't you feel it? What do you really know about transactions between members and their LLCs? Let's try an experiment. Call your accountant, or one out of the yellow pages. Ask him, " Are there any circumstances where I would sell a piece of land to my LLC and recognize a gain or loss? Am I even permitted to do this?" Let me know how that goes. Curt,
When you say, “He sold the land to the LLC for interest in that company, this is definately a reportable taxable event. He didn’t report it and he made money off of it…” you are absolutely and completely incorrect. This is not a matter of opinion. Why are you climbing out on this limb? This is a specialized area of knowledge, one in which you clearly are not versed. Don’t you feel it? What do you really know about transactions between members and their LLCs? Let’s try an experiment. Call your accountant, or one out of the yellow pages. Ask him, ” Are there any circumstances where I would sell a piece of land to my LLC and recognize a gain or loss? Am I even permitted to do this?” Let me know how that goes.

]]> By: carol johnson http://www.floppingaces.net/2006/10/12/the-harry-reid-hang-up/#comment-1753 carol johnson Fri, 01 Dec 2006 21:23:00 +0000 http://www.floppingaces.net/2006/10/12/the-harry-reid-hang-up/#comment-1753 Yeah, and then there's also this: <a href="http://worldnetdaily.com/news/article.asp?ARTICLE_ID=52405" rel="nofollow">http://worldnetdaily.com/news/article.asp?ARTICLE_ID=52405</a> YouTube blocked video mocking Clinton Administration about their dealings with North Korea. WTF?? ..... Folks the Clinton censorship machine is alive and well. Now you tell me ditto for Filthy Harry? Google has already helped supress free speech in China and now it seems they fully intend to do the same thing with YouTube here. Damn! Carol Yeah, and then there’s also this:

http://worldnetdaily.com/news/article.asp?ARTICLE_ID=52405

YouTube blocked video mocking Clinton Administration about their dealings with North Korea. WTF??

…..

Folks the Clinton censorship machine is alive and well. Now you tell me ditto for Filthy Harry? Google has already helped supress free speech in China and now it seems they fully intend to do the same thing with YouTube here.

Damn!

Carol

]]> By: Yiddish Steel http://www.floppingaces.net/2006/10/12/the-harry-reid-hang-up/#comment-1754 Yiddish Steel Fri, 01 Dec 2006 21:23:00 +0000 http://www.floppingaces.net/2006/10/12/the-harry-reid-hang-up/#comment-1754 Nnnnniiiiice! Just more of that "KKKulture of KKKorruption" from the DemoKKKrats and that hypocrite, Harry (G)Reid. Nice work, Curt. Nnnnniiiiice!

Just more of that “KKKulture of KKKorruption” from the DemoKKKrats and that hypocrite, Harry (G)Reid.

Nice work, Curt.

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