From David Kravitz at the highly recommended Blue Mass Group blog: it appears that the story of Massachusetts Republican Senate nominee Gabriel Gomez's questionable $281K tax deduction has legs. For the first week or so after the April 30 primary, Gomez has been a media darling here in Massachusetts (the "new Scott Brown" and other such garbage) to the consternation of Democrats like me. The early polls have indicated a tight race.
I'm reporting this only to share the happy news, as reported by David, that Gomez is (1) refusing to release his 2005 tax return because "I have nothing to hide," and (2) being very abrasive to reporters here. All of this has led to strong criticism from the very folks in the local media - folks like Andy Hiller and Jon Keller - who usually can be expected to carry the water for a "moderate" Republican like Gomez.
Gomez's home is in the wealthy town of Cohasset, on the coast south of Boston, in the beautiful Cohasset Common Historic District. In 2005 Gomez granted a nonprofit organization, the National Architectural Trust, a conservation easement on the house. Essentially he voluntarily assumed a legal obligation, enforceable by the Trust in court, not to alter the historic appearance of his house from the street. For this he took a $281,000 deduction on his 2005 income taxes as a "charitable donation."
Federal tax law allows these sort of conservation easements to be treated as charitable donations to the organizations in whose favor they are granted, even though no cash donation is made. The amount of the deduction is capped at 15% of the home's prior value, and is supposed to be based on the decrease in the home's value resulting when you promise not to alter the facade. The theory is that buyers won't like being bound by those restrictions and you'll have to take a hit when you sell.
The problem, for Gomez, is that the laws governing the Cohasset Common Historic District already prevented him from doing the things he promised not to do. Given that these restrictions were largely already in place, there's a strong argument that the decrease in his home's value (and thus the appropriate deduction), would be zero. In any event, not even close to the maximum allowable deduction he took. I can say from my own knowledge (I was married about 100 feet from his house) that houses in that Historic District tend to be more valuable, not less, than houses outside it.
This guy is more Mitt Romney II than Scott Brown II. Let's get this done for Ed Markey and keep the seat a deep, deep blue.