Wednesday, October 5, 2011

State getting hosed by developers

From NY1:

Among the steel, stone and concrete that make up the many structures in the city, real estate developers may be cheating the government out of hundreds of millions of dollars each year in unpaid taxes.

"If I were a resident of New York, I would definitely be outraged," said Jerry Curnutt, a former agent for the Internal Revenue Service. "These folks know the rules and to not pay what you owe is egregious."

Curnutt said many real estate partnerships are not paying what they owe.

When he was working for the IRS more than a decade ago, Curnutt figured out how to use tax data to catch them.

"It was exciting because the data can identify and disclose with a great deal of specificity,” said Curnutt.

The process isn’t too difficult to understand. If an individual decides to partner up with someone to construct a building, they go to the bank and receive a loan. Each year when doing taxes, they deduct a portion of that loan.

However, when they sell the building — or even if the bank takes it over — they owe the government the cumulative amount they saved from the deductions.

"We’re talking about unreported tax gains in many cases in well in excess of $100 million," said Curnutt.


Anonymous said...

The rich get richer and the beat goes on...

Anonymous said...

You think that's having balls?

Location...Flushing...many years ago:

When Tommy Huang wanted to build his "Main Street Tower" (on the S/E corner of Northern & Main) he used 2 different on Main and the other on Northern to get loans from different banks.

And those banks fell for it!

NYC is getting high pressure hosed from developers in many ways.

Unfortunately our crooked pols (who are often in cahoots with them)let the tail wag the dog!

The real estate development industry runs this city.

It's residents have little to say about it and their supposed representative boards...are a waste of taxpayers' money.

Abolish them, once and for all!

And while we're at it, we don't need borough presidents either.

They don't represent the best interests of their boroughs.

They're mostly on the job to grease over-development. if we did all that...look at the money we'd, Mr. Comptroller Liu?

Anonymous said...

"Occupy Wall Street" is just the beginning of "the revolution".

"The Great Recession" is about to go into phase 2...and the people are fed up!

Wait and see.

Anonymous said...

I hope someone from the Department of Finance is reading this blog.

Anonymous said...

What this is about is called depreciation. As I understand it, if you own property that is being held for investment, you may deduct from your investment income that year's deterioration of your building or equipment. The tax code provides a formula to calculate depreciation. When you take this deduction, you also have to reduce the cost basis (the price that you paid for the property) as well. I instruct my accountant to make certain not to play games ... why ... I think I'm the only person in the early 80's who got a ticket for riding between the subway cars. I just don't do crime well ... I'll leave that to others with that talent :)

Anonymous said...

Developers rule!