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Court Affirms Tax Evasion Conviction

By Jonathan Byrne

US v. Cole: Cole was a real estate agent who partnered with three others to purchase commercial real estate. Cole negotiated the purchase price with the sellers and misrepresented the final amount of the sale price to his partners. The difference in the price paid and the seller's actual price demanded was absorbed by Cole, to the tune of $2 million. He also engineered a similar purchase involving a $1 million note financing one of the properties. Those funds Cole appeared to treat as sale commissions, in multiple venues. In 2005, Cole filed tax returns for 2001, 2002, and 2003 - the years during which he acquired these funds - but did not report any taxable income. He argued that the real estate money came from "assignment fees," rather than commissions, which subjected them to favorable tax treatment as capital gains...continue to full post

Full post as published by Fourth Circuit Blog on January 24, 2011 (boomark / email).