Tuesday, August 15, 2006

Patterns: California Republican Lawmakers

Today on the Al Franken show, Melanie Sloan of Citizens for Responsibility and Ethics in Washington taked about William Heisel's La Times Article about U.S. Rep. Gary Miller's curious run of eminent domain luck:

August 13, 2006

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. For Miller, a millionaire land developer in the Inland Empire and a senior member of the House Transportation and Infrastructure Committee, repeated use of the forced-sale exemption has enabled deferment of capital gains taxes through at least 2009.


Post a Comment

<< Home

More blogs about Eschew Obfuscation.
Who Links Here