Forbes, Billionaire Miami Dolphins Owner Gets Shut Out At Tax Court:
Billionaire Stephen Ross, owner of the Miami Dolphins, who thanks to a $200 million donation (largest in the history of the school) was described as Leader, Visionary, Philanthropist, Wolverine by the Universtiy of Michigan. ... Mr. Ross got his start in real estate based on his knowledge of federal tax garnered as a tax attorney for Coopers and Lybrand. ... I have to wonder whether the name of his flagship Related Companies is a tax geek joke.
Forbes, Billionaire Stephen Ross And The Ten For One Charitable Deduction:
The brazenness of the charitable plan with the University of Michigan designed to benefit Wolverine Billionaire Stephen Ross revealed in the Tax Court RERI Holdings I decision is stunning.
The bare bones of the plan are that RERI, whose principal investor was Mr. Ross, bought an asset (call it "the thing") which it donated to the University of Michigan toward a $5 millon pledge that Mr. Ross had made. Under the gift agreement UM had to hold onto "the thing" for two years, then sell it. The amount that UM received would be credited to Mr. Ross's pledge. Round numbers RERI acquired "the thing" for $3 million. When it came time to sell it UM had it appraised at $6 million. UM sold it to a partnership for $2 million under pressure from Mr. Ross who threatened to count that amount towards his pledge, if they ended up getting less. How large was the charitable deduction taken by RERI, of which Ross was the principal investor? That would be $33,019,000.
Mr. Ross is a prominent philanthropist. It is tough to characterize this particular transaction as philanthropic as the claimed tax savings dwarf the amount out of pocket or the amount netted by the University of Michigan. You have to wonder to what extent University development officers knew what was going on. Was University of Michigan seeking charitable donations or renting its brand to a tax avoidance scheme?
The partnership that bought "the thing", sold it to another "charitable" individual for $3 million. That individual gave it to another charity and took a deduction of $30 million. So "the thing", which seems to have been worth around $3 million in 2003 generated $60 million in charitable deductions. Who knows? Maybe there was another lather, rinse repeat in 2007.