The Harry Reid Hang-Up

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Someone posted to YouTube a news report from Nevada about the Harry Reid land deal, which includes the audio of the hang-up:

Mike from Mike’s America reminded me about Harry’s statement where he stated “I know a thing or two about corruption”….it sure appears so huh?

Now I know a sex scandal is easier to wrap your heads around then a financial one, and a more sexy scandal to gossip about, but this is a easy one. Basically Reid buys some residentially zoned land, he transfers it to an LLC corporation for no profit, but a share of the LLC. Then, the LLC applies to rezone that land to a commercial zone but they are denied. They appeal it and during that appeal Reid’s partner mentions Reids name and bam….the land is rezoned. The LLC then sells the land for a 1.2 million profit. Harry gets a profit and fails to notify the Senate.

That’s it in a nutshell.

Check out my earlier post here.

UPDATE

Check out this great .PDF file put together by the LA Times sometime back which showed how knowing Reid, or being related to him will get you places…..and rich:

The article can be found here:

At least 17 senators and 11 members of the House have children, spouses or other close relatives who lobby or work as consultants, most in Washington

[…]But Harry Reid is in a class by himself. One of his sons and his son-in-law lobby in Washington for companies, trade groups and municipalities seeking Reid’s help in the Senate. A second son has lobbied in Nevada for some of those same interests, and a third has represented a couple of them as a litigator. In the last four years alone, their firms have collected more than $2 million in lobbying fees from special interests that were represented by the kids and helped by the senator in Washington. So pervasive are the ties among Reid, members of his family and Nevada’s leading industries and institutions that it’s difficult to find a significant field in which such a relationship does not exist.

In an internal memo, [Reid chief of staff Susan] McCue said Reid’s family members had lobbied his staff by supplying research, technical support and strategic guidance. She described them as effective advocates for their clients.

How special.

UPDATE II 1415hrs PST

Tom at The New Editor tells me that YouTube has pulled the video….mine still works tho.

Tom also did some good detective work with that article about Reids family. It appears his son not only sits on the same Commission that approved the zoning change, but is the Chairman. You think the MSM would be all over that if he was a Republican?

You bet your ass they would be.

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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.

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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.

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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

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Nnnnniiiiice!

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

Nice work, Curt.

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