The Boston Globe reported Thursday major alterations to the facade of the the Gomez family’s 112-year old home — assessed in 2012 as valued at more than $2 million — were prohibited under the Cohasset, MA town by-laws, as it falls into the Cohasset Common Historic District. As such, experts told the paper, there was little or no value to his “donation” when he promised the the National Architectural Trust (now the Trust for Architectural Easements) that he would make no major changes to the outside of his home.
In 2005, Gomez claimed the $281,500 income tax deduction, suggesting that agreeing to the easement had reduced the value of his property. Five weeks later, the Globe noted, the Internal Revenue Service identified such tax deductions for valueless easements as one of its “Dirty Dozen” tax “schemes that promise to eliminate taxes or otherwise sound too good to be true.” In a section called “Abuse of Charitable Organizations and Deductions,” the advisory warned:
“A “contribution” of a historic facade easement to a tax-exempt conservation organization is another example. In many cases, local historic preservation laws already prohibit alteration of the home’s facade, making the contributed easement superfluous. Even if the facade could be altered, the deduction claimed for the easement contribution may far exceed the easement’s impact on the value of the property.
A Gomez campaign spokesman told the Globe that Gomez’s easement goes further than the existing zoning laws, in part because homeowners have the right to challenge any rejected requests for alterations in court. He also noted that the IRS did not challenge Gomez’s deduction — as it did in many other cases — but refused to explain how the value of the easement was calculated.
But Dean Zerbe, former senior counsel for then-Senate Finance Committee Chairman Chuck Grassley (R-IA), blasted the deduction as “unconscionable” and mostly for the wealthiest “one percent.” “All this is a tax break shenanigan that all the blue bloods on Beacon Hill and the swells in Georgetown take advantage of,’’ he told the paper, “It is wealthy people playing fast and loose. Nobody is taking tax breaks on mobile homes.’’
But while he personally took advantage of this complicated tax loophole, he claims to want to do away with such provisions. On Monday, Gomez told CNBC’s Lawrence Kudlow that he would support comprehensive tax reform to benefit CEOs. “Absolutely we need to have a comprehensive tax reform. I think we need to start looking at the corporate tax loopholes as well as the personal loopholes… we shouldn’t have a tax code that is thousands of pages long.”