'Dealer Intent' converted to 'Investor Intent' midstream – Ta Da!!
And other pulling-rabbits-out-of-hats stories.
By Bradley Burnett
Federal Tax Update
There is a long-standing story about a man changing water to wine at a wedding. Not a bad deal. And, pretty economical at that. Recently, a Houston area real-estate developer pulled off pretty much the same thing. And saved about $1.9 million in income tax as a result.
Our “pulling-rabbits-out-of-a-hat” story begins long ago with an 883-acre oilfield southwest of Houston. A real estate developer bought it in 1998 with visions of subdividing into residential and commercial lots and making millions. For 10 years, Sugar Land Ranch Development, LLC (SLRD) cleaned up the oil field, built a levee to keep the nearby Brazos River under control and agreed to a development plan with the city of Sugar Land. But, no dividing into lots or construction ever took place.
So far, so good.