Michael Hiltzik of the LOS ANGELES TIMES reports that thanks to complex financial manuevering, including questionable losses on real estate property, the Jamie and Frank McCourt paid zero in federal and state income taxes last year.
The McCourts, who own the Los Angeles Dodgers (so she says; he says he’s the owner and she’s not), jointly pocketed income totaling $108 million from 2004 through 2009, according to documents Jamie McCourt recently filed in the couple’s divorce case in Los Angeles County Superior Court.
On that sum, they paid zero federal and state income tax. Jamie suggests that some tax breaks will apply this year too.
Let me know if you’ve heard this one before: the allegedly legal tax scheme was primarily designed to prop-up the McCourts embarrassingly overextended, leveraged lifestyle.
The court papers indicate that the McCourts deliberately structured their business at least partially to allow them to live tax-free. The McCourts have also borrowed against future business income — in 2007 they took out a $140-million loan against future Dodger ticket sales, of which $20 million went to fund their lifestyles, tax-free.
The tax benefits reaped by the McCourts helped turbocharge their lifestyle. There are eight houses, including four in Holmby Hills and Malibu. The McCourts treated their family and business checkbooks as “largely one and the same,” according to an e-mail from a McCourt executive Jamie filed in court. (Oddly, the e-mail ascribes to her the philosophy of “why have a family business but to support the family lifestyle.”) This paid for meals in the best restaurants, floral arrangements for home and office from the finest florists, country club dues, personal travel on the Dodgers plane, Jamie’s makeup “for Dodger events” ($386 a month).
Her makeup was $386 a month? Finally an expense that needs to be upped!