Stay Out Of Trouble While On Spring Break

GORGEOUS — Fri, 02 Mar 2012 03:05:25 +0000

Underage Drinking

You must be 21 to possess or consume alcoholic beverages in the State of Florida. It is a criminal offense, a misdemeanor, to possess or drink alcohol under the age limit. Unfortunately, some colleges and universities also treat the consumption of alcohol by an underaged person as a violation of their code of conduct. Even though you may receive a “slap on the wrist” from the legal system, a student could face disciplinary proceedings on campus.

Keg Parties

Florida has what’s known as the “open house party” statute. It is a misdemeanor to permit underaged persons to consume alcohol at a social gathering. This means if you have a keg party, you have a responsibility to ensure that underage persons are not consuming alcohol.

Open Containers

You can receive a traffic ticket for having an open container of alcohol inside the passenger compartment of the vehicle. Some police officers interpret this law as prohibiting the transportation of any empty cans or bottles in the vehicle. In fact, the statute does not outlaw garbage, only open containers that actually hold alcohol.

Driving Under the Influence

It’s not against the law to drink and drive. After all, every bar has a parking lot. It is against the law to consume alcohol to the extent it impairs your normal faculties, and then have a motor vehicle under your control. Often, the offense of DUI is proven through the administration of a breath test. The “legal limit” under Florida law is 0.08% blood alcohol. This is not a high threshold. Often, it can be met by the consumption of three or four beers, or a couple of mixed drinks. It all depends on numerous individual variables. As always, it is best to have a designated driver.

Marijuana

Some states have decriminalized possession of small amounts of marijuana. Unfortunately, Florida has not. It is a first-degree misdemeanor, punishable by up to one year in the county jail, to possess less than 20 g of marijuana. Possession of more than this amount is a felony. Additionally, the sale or delivery of any amount of marijuana is likewise a felony.

Other Drugs

The possession of most other drugs is a felony under Florida law. This includes just about any pill obtained from a pharmacy, unless you have a prescription for that particular drug. Typically, unless the pill is an actual prescription bottle, the police officer will not give you the benefit of the doubt. You will be arrested, have to post bond, and present your prescription to the prosecutor in order to have the charge dismissed.

Seat Belts

It is a traffic offense to operate a vehicle without a seatbelt. Likewise, passengers also have to be belted. Police officers often use this law as a basis to stop a vehicle that they regard as suspicious. Many arrests for criminal offenses begin with a traffic stop for a seatbelt violation.

Tinted Windows

Florida also has a law that limits the amount of window tint on the windshield and front door windows of a vehicle. Police officers also exploit this law to stop vehicles. If your vehicle has dark window tint, consider driving around with your front windows down.

Tow Zones

Some beach businesses have arrangements with tow companies to remove vehicles from their parking lots. Some of them have kick-back relationships with the tow companies to supplement their incomes over spring break. Many of the businesses and tow companies ignore laws which limit their right to tow away vehicles. The law requires that the business display a prominent sign that warns the area is a tow zone. The sign must also provide the name of the tow company. In addition, the tow company must notify law enforcement whenever it tows a vehicle. On many occasions, dozens of vehicles will be towed away and the owners forced to pay cash to the tow company to retrieve the vehicle. Both civil and criminal liability can attach to this activity if the business and tow company ignore the law.

Sexual Offenses

In Florida it is a felony to have sexual contact with any person under the age of 16. It does not matter that the “victim” consented to the relationship or had a fictitious driver’s license indicating that he or she was over the age of 18. It is also a felony for a person who is age 24 or older to have sexual contact with a person who is either 16 or 17. Again, it is not a defense to argue that the relationship was consensual or that you met the victim in a bar. An arrest for a sexual offense can literally ruin your life. The only safe course of conduct is to socialize with people that you are absolutely certain are 18 or older. Sexual relations between consenting adults are lawful. The operative term is “consensual.” A person who is comatose cannot consent; therefore, sexual relations with such a person can be construed to be rape.

Indecent Exposure

It is a crime to exhibit your junk in public. This does not include urinating in public, although some law enforcement officers believe that it does. Rather, the State of Florida outlaws the display of sexual organs in a lewd manner. Although the crime of indecent exposure is only a misdemeanor, some jurisdictions may regard it is a sexual offense. It is best to avoid an arrest and conviction for the crime of indecent exposure.

Self-Defense or Justifiable Homicide

GORGEOUS — Sun, 02 Oct 2011 05:59:34 +0000

Cases involving self-defense are extremely fact-specific. In other words, every case is different. There are some general rules that do apply, however. First, it is generally a bad idea to argue the merits of your case to investigators. Eyewitness testimony is often absent, or unreliable. The results of forensic testing will not be available for weeks. Many times the decision to make an arrest is a direct consequence of a suspect’s statement. Say the wrong thing, or lie, and you go to jail. Believe me, experienced investigators are very adept at getting suspects to say the wrong thing. On the other hand, silence cannot be used against you. Investigators despise suspects who “lawyer up,” but the only safe course of conduct is to politely request the assistance of counsel when dealing with people who may wish to send you to prison for the rest of your life. This is where the second general rule comes then: you need to consult with an attorney.

It is always better to have a skilled advocate tell your side of the story. After all, this is what you pay an attorney to do. It is important to retain counsel as early in the process as is practicable. Witness memories fade and evidence disappears. An experienced attorney can obtain witness statements and preserve evidence while it is still fresh. He can also pursue forensic testing by independent laboratories, or request additional testing by crime laboratories. Many times a successful claim of self-defense hinges on physical evidence involving firearms, ballistics, blood spatter, DNA, crime scene reconstruction, or medical testimony.

Under current Florida law, every citizen possesses a privilege of self-defense. The Florida Supreme Court has held that this immunity from prosecution entitles a defendant to a hearing before a Judge to determine whether the prosecution has sufficient evidence to overcome the privilege. An attorney who has been involved in the case from day one is better- equipped to file a motion challenging the arrest in a timely fashion. I have seen defendants sit in jail for a year or more before a jury trial could be scheduled. It can be a hollow victory if a wrongly accused person loses everything in his personal life before he can win an acquittal in his case. Unfortunately, most cases will not be disposed of by arguing the motion in front of a judge. Judges are inclined to permit juries to make these types of decisions.

Rule number three: you need an experienced trial attorney who is not learning on the job. The law of self-defense is a mine field. Unless an attorney has actually tried one or more self-defense cases he will not be prepared to deal with all of the issues that arise during a trial. For instance, the standard jury instructions are confusing and contradictory. An attorney must be prepared to tailor the instructions to fit the facts applicable to his client’s case. There are actually two ways a person may use deadly force against another person: defense of self, and defense of felony. Typically, the jury is told that a defendant may use deadly force only in the event that he is under imminent threat of death or great bodily harm , an often difficult obstacle to overcome. On the other hand, one can use deadly force to prevent the imminent commission of a forcible felony, without the need to demonstrate genuine probability of bodily harm. It is always easier to show that a defendant believed that he was the victim of a crime, such as an assault or a burglary, instead of showing that the victim was about to kill him. The standard jury instructions do not properly differentiate between the two types of self-defense and the jury is left with the impression that a defendant cannot use self-defense unless it is established that the victim would have shot or stabbed the defendant if he had not acted first. This is not the law.

There are also two gradations of force: deadly force and non-deadly force. As you might expect, a person has much more leeway in using non-deadly force. Whether a particular instrumentality constitutes deadly force or non-deadly force is often a question for the jury. Many people assume that if a gun is involved, the law applicable to deadly force controls. In fact, the law equates the discharging of a firearm with the use of deadly force. Merely pointing a gun in the direction of a person is not. Likewise, simply because the victim died does not automatically mean that the defendant used deadly force. A lawyer must be prepared to convince the judge and the jury that the law of non-deadly force applies in those situations.

Self-defense, or “justifiable homicide,” as it is defined in the jury instructions, is related to yet another separate and distinct doctrine, namely,”excusable homicide.” Excusable homicide is a death that occurs by accident and misfortune. I have read dozens of statements given by defendants who tell investigators: “I don’t know what happened. The gun just went off.” This brings us back to rule number one concerning statements to investigators. Don’t try to explain what happened. Even though this statement may have been truthful, it is harmful to the defense. Justifiable homicide is an intentional act. Excusable homicide is an act that occurs unintentionally. It is difficult to argue self-defense if the defendant did not know what happened. Again, where deadly force is used, the law requires a defendant to have a reasonable belief that he is about to be injured or killed by the victim. At the very least, it would require the defendant to tell investigators: “I thought he was about to rob me, rape me, or break into my house.” An inexperienced attorney may compound the dilemma by arguing that it was either self-defense or an accident. This strategy is doomed to failure. Jurors are not receptive to a defense that asserts, in effect, “I didn’t do it, and if I did, it was an accident.”

On the other hand, I have represented defendants who, acting on the suggestions of investigators, thought it was better to turn an excusable homicide case into a justifiable homicide case by claiming they were afraid of the victim. If a gun goes off accidentally because a defendant does not know how to operate the firearm safely, that is a defense to a charge of murder. It is not necessary to make up facts concerning a relationship between the defendant and victim in order to substantiate a claim of self-defense. Instead, the attorney should argue that the State has the burden of proving that it was not an accident. This is difficult to do without exploiting statements made by the defendant.

No Money, Mo’Taxes

GORGEOUS — Sun, 02 Oct 2011 05:53:31 +0000

What is income? This question has persisted from the inception of the federal income tax code. Courts have defined income as “an accession to wealth, by any means whatever.” Section 61 of the income tax code provides many examples of income, including wages, salary, and commissions. It also references something called “discharge of indebtedness.” This concept has taken on many other names, including “cancellation of debt,” “debt forgiveness,” and even “phantom income.”

A simple example should suffice: Sam loans Bill $1000. Bill has a difficult time paying Sam back and is only able to return small amounts of the loan on an irregular basis. Rather than accept $10 every other week, Sam decides to “write off” the loan. This allows Sam to take a $1000 bad debt deduction. This also results in Bill realizing $1000 in income. If Sam were a financial institution, he would send Bill a form 1099 – C entitled “cancellation of debt.” This would cause Bill to include the $1000 as income on his tax return.

In this example, Bill actually received $1000 from Sam. Theoretically, he could set aside $250 of that amount to pay his income tax obligations. But what happens when a taxpayer does not receive any money whatsoever? This happens routinely with distressed real estate.

Consider the following scenario: Dan has a steady job and decides to purchase his dream home at the peak of the real estate market. He purchased his home with an interest-only $400,000 mortgage. After two years he must begin repaying principal, and his monthly payment mushrooms. He is unable to make the mortgage payments and decides to sell his home. Unfortunately, the fair market value of his home is now $200,000. Meanwhile, his obligation to the lending institution has increased by the total of all of his missed payments, interest and penalties. He now owes $425,000. He moves out of the house into an inexpensive apartment and places his dream home on the market. His real estate agent contacts a buyer of distressed properties who is willing to pay $200,000 in cash for the home. Dan contacts as lender who is willing to accept the deal and release Dan from any obligations under the note and mortgage. In January, Dan receives a 1099 – C from his lender indicating that he is received $225,000 in income. If Dan is in the 20% income tax bracket, he will owe the IRS $45,000.

Because of situations like this, Congress passed a statute exempting income from the cancellation of debt involving a principal residence. Unfortunately, Dan moved out of the home. Does it still qualify as his principal residence for income tax purposes? It depends upon all of the facts and circumstances surrounding Dan’s living arrangements. Dan would be well advised to seek the advice of a tax expert in this situation.

But let’s assume that the home does not qualify as Dan’s principal residence. Can he avoid his $45,000 tax liability? The answer is a qualified “yes,” but it requires advance planning. In other words, Dan should anticipate the realization of this income and take steps in an effort to avoid the tax obligation. Basically, Dan must plan to be “insolvent” at the time the debt is canceled. When is the debt canceled? Again, the answer depends on all of the facts and circumstances surrounding the sale of the home and the actions of the lender. A tax expert can assist Dan in meeting one or more of the exemptions available under the tax law.

Silence is Golden

GORGEOUS — Sun, 02 Oct 2011 05:47:13 +0000

Everyone knows that innocent people have nothing to hide. If a suspect will not talk to the police, he must be guilty. This is conventional wisdom, but it is absolutely wrong. In my opinion, it is always risky to consent to an interview with police investigators without an attorney present. It doesn’t matter whether you’re guilty or innocent. I’ll give you some examples (all true):

Robert was a suspect in a murder case. He was also mentally disabled. After two days of questioning, Robert admitted being at the victim’s home when she “fell on a knife.” The victim’s home was burned to the ground. The source of the fire was cooking oil on the burner of the stove. Robert was charged with arson and first degree murder.

Forensic evidence established the time of the fire within a 20 minute window. During that time frame, Robert was purchasing motor oil at a store several miles from the scene of the crime. He left the store, returned home and placed a phone call to his girlfriend which was confirmed by telephone records. The fire occurred in the sandhills and Robert placed the telephone call from his mother’s home in Springfield. There was no possible way he could have been present when the victim was stabbed and the home set ablaze. The only evidence against Robert was his statement. He was incarcerated for almost 2 years before the charges against him were dismissed.

Aubrey was driving his pickup truck along a dirt road in Gulf County while arguing with his girlfriend. Both had been drinking. According to Aubrey, his girlfriend opened the passenger door and” bailed out.” She late motionless on the side of the road. Aubrey was able to flag down another vehicle and use a cell phone to call 911. Investigators arrived and questioned Aubrey. They did not believe his story. Finally, Gulf County Sheriff Frank McKeithen located a 22 rifle in the back of Aubrey’s pickup truck and surmised that Aubrey had struck the victim with the rifle. The muzzle of the rifle had blood and hair on it. Even though the victim had no visible head injuries, Aubrey agreed with the sheriff that he and his girlfriend had argued, and that he had struck her on the head with the rifle. He was arrested for second-degree murder. Forensic tests revealed that the hair and blood belonged to a dog. A jury convicted Aubrey of manslaughter solely based upon his false statement. Aubrey died in prison.

Laura was attempting to end a relationship with her boyfriend. When her boyfriend came to her place of employment she instructed him not to return to her home. She got off work, drove home, and saw that her boyfriend’s vehicle was parked in the front of the home. Rather than enter her own home and initiate a confrontation with her boyfriend, Laura spent the night in her vehicle. The next morning she entered the home, and asked her boyfriend to leave. An argument ensued. According to Laura, her boyfriend began collecting his belongings within the home. He retrieved a 22 revolver from a night stand, and then began removing bottles of hot sauce from the refrigerator. At that point, the gun discharged and the boyfriend was fatally wounded.

Forensic evidence established that the boyfriend’s mouth was open when the shot was fired as a bullet penetrated the back of his throat. It also established that the refrigerator door was open when he was shot. This evidence supported Laura’s version of the events. During several hours of questioning, Laura insisted that the gun was in her boyfriend’s hand when it discharged. Finally, Capt. Nolan arrived at work and observed the questioning. He did not believe Laura.

Capt. Nolan entered the interview room and confronted Laura. Nolan informed Laura that he had just left the hospital where her boyfriend was being treated for the gunshot wound. Laura was assured that her boyfriend was alive. Moreover, Nolan informed Laura that her boyfriend was able to give an account of the events. According to him, it was Laura that was holding the revolver when it discharged. Gradually, Laura changed her story and admitted that she was holding the pistol when it fired. Nolan concluded the interview at that point. At that point, Laura then asked Nolan how her boyfriend was doing. Nolan replied, “he’s dead.” Laura began crying uncontrollably. On the basis of her statement, she was convicted of manslaughter. She is still in prison.

In each of these cases, a suspect was persuaded to give a statement that, in all likelihood, was false. Each was prosecuted on the basis of that false statement. In my opinion, all three of these defendants were innocent of murder; yet, each was prosecuted. They cooperated with investigators and gave statements reflecting their version of the events. Unfortunately, investigators determined that they were lying. Psychologically, each of these three suspects determined that it would be better to agree with investigators than persist in telling the truth. This dynamic has been firmly established by research and case studies. In fact, the techniques employed by investigators are designed to induce admissions by suspects. This technique is commonly referred to as the Reid technique, named after its author. In his book, Mr. Reid claims that the technique is so effective that he should only be used when investigators are positive that the suspect is guilty.

Whenever I am asked to give advice to someone concerning a police interview, my response is the same. There are only two reasons that a police officer wishes to question you. You are either a witness or a suspect. If you are 100% certain that you are merely a witness, there may be no danger in consenting to an interview. On the other hand if you are a suspect, investigators are merely seeking to obtain inculpatory statements that they can use against you in order to prosecute you. The problem is you can never be absolutely certain of your status.

In either situation your response should be the same: “have the State Attorney send me a subpoena.” Unlike investigators, attorneys are bound by the rules of ethics. If you are questioned by an attorney, he cannot use deceptive measures and mislead you regarding your rights. Additionally, the questioning occurs on the record in an office, and not a police station. More importantly, if you receive a subpoena, you also receive immunity. This means your statement cannot be used against you. If you are only a witness, there should be no hesitation in serving you with a subpoena to appear before a prosecutor in the State attorney’s office.

On the other hand, prosecutors never subpoena suspects. The whole point of interviewing suspects is to use their statements against them. As indicated earlier, the issuance of a subpoena bestows immunity upon the witness; therefore, the State cannot use the statement against the witness. If you asked for a subpoena, you will find out whether you are a witness or a suspect.

Deductions for Dry Wall

GORGEOUS — Thu, 29 Sep 2011 06:53:12 +0000

To compound the woes of the real estate market, a product known as Chinese drywall appeared during the real estate boom. Chemicals within the drywall proved corrosive to copper pipes and wiring within the wall cavities. In order to remedy this situation, all of the drywall had to be removed from the interior walls and the wiring and plumbing replaced. Unfortunately, many of the homes were worth less than what their purchase price reflected, making it impossible for homeowner to borrow funds to make home improvements. Does a reduction in the home’s value qualify as a casualty loss for income tax purposes?

Under a literal reading of section 108 of the tax code it would appear not. However, in a similar situation, the IRS adopted a more liberal policy regarding hurricane damage from Katrina, Rita, and Wilma. The service actually allowed an income tax deduction for the diminution in value of the damaged homes. As of yet, the IRS has not adopted a similar policy vis a vis corrosive drywall.

In a 2010 document, the IRS mandates that a taxpayer remediate the damage before claiming a tax deduction for a casualty loss. In other words, the taxpayer must spend money to correct the problem before the loss is deductible. This is an impossible burden for many homeowners affected by this dilemma. They simply do not have the funds to make the necessary repairs. In effect, they need the benefit of the tax deduction in order to procure the funds to make the repairs. Perhaps the IRS will reconsider its current policy regarding Chinese drywall.

DUI – You Don’t Have To Be Drunk And You Don’t Have To Be Driving

GORGEOUS — Thu, 29 Sep 2011 06:48:36 +0000

I tried my first DUI case in 1981. At that time, there were two separate offenses dealing with driving while intoxicated. One was DUI, or driving under the influence of alcohol to the extent one’s normal faculties are impaired. The other was DUBAL, or driving with an unlawful blood-alcohol level. One could accumulate three DUI convictions before exposure to mandatory jail time. Similarly, one could accumulate three DUBAL’s before the judge had to impose a mandatory jail sentence. As you might expect, a defendant would plead to DUI on his first offense and then a DUBAL on a second offense, a DUI on his third offense in a DUBAL on his fourth offense, and so on. Rarely did a defendant receive jail time because of the interplay between the two statutes. It was a good time to be an impaired driver.

But even in 1981, the law had dispensed with the notion of drunk driving. Originally, in order to be convicted of a crime, the prosecutor had to prove, first, that you were driving, and second, that you were drunk. That proved to be a difficult task in many cases, so the law changed during the 1970s to make it easier to convict people. Instead of proving that the defendants was driving the vehicle, prosecutors only had to prove that he had the capability of driving the vehicle. In other words, prosecutors no longer had to “put the defendant behind the wheel.” More importantly, prosecutors only had to prove impairment, and not drunkenness. In a DUI case, a prosecutor must prove only that the defendant’s normal faculties were impaired, whatever that means. In a case of DUBAL, he has to prove the defendant’s blood alcohol level was over .10%. Still, too many defendants were “getting off.”

Over the years, a steady evolution has occurred, all designed to make it easier to convict drivers of DUI. For instance, there is no longer a distinction between driving under the influence and driving with an unlawful blood-alcohol level. The state is allowed to prove guilt under either theory. No longer is .10% the line of demarcation between impaired and non-impaired driving, but .08%. In 1981, if a driver refused to consent to a breath test, his refusal was inadmissible evidence at his trial. Now, not only is it admissible, but prosecutors routinely argue that the driver must’ve been impaired; otherwise, he would’ve taken the breath test. Prior to legislative enactment permitting this strategy, appellate courts had determined that it was both irrelevant and prejudicial to the defendant. Many will argue that these are positive changes in the law, all designed to get impaired drivers off of our streets and highways. That may be, but it can also lead to absurd results.

Any experienced DUI attorney has dealt with the driver who was “sleeping it off.” In this case, instead of driving away in his car, the impaired driver realizes he has had too much to drink and decides to spend the night on his front seat. His car keys are either in the ignition or in his front pocket. Under the law, he can be convicted of DUI because he is impaired and he has the capability of driving off in the car. The fact that he chose not to drive the car is irrelevant to the prosecution’s case. In my experience, some jurors will use common sense and vote to acquit, others will apply the letter of the law, and convict.

I predict that before the end of my career I will see a case involving a motor home that is parked in a campground. An overzealous police officer will arrest the owner because he is obviously intoxicated and he has the ability of driving off in the motor home, notwithstanding that the owner is in his pajamas and has his vehicle is connected to water and sewer. This same scenario can apply to the yacht owner whose vessel is securely moored to the dock.

Obviously, a suspect does not have to be operating a car, a motor home, or a boat to be arrested for driving under the influence. But at least he has to be inside of a motor vehicle, right? Unfortunately, it is unlawful to be in control of a “vehicle” while impaired. Basically, a “vehicle” is defined as any mode of transportation that has wheels. Under the law, an intoxicated person on a bicycle, skateboard, electric golf cart, or any wheeled instrumentality could be arrested for DUI. Again, any experienced DUI attorney has observed a case involving a drunken bicyclist. My career will not be complete until I have seen a case where a police officer arrests and intoxicated skateboarder who was walking down the sidewalk with a skateboard under his arm.

If you must drink to excess but still travel from point A to point B, I suggest you ride a horse. A horse is not a vehicle and so you can ride a horse while you are under the influence of alcohol or drugs. More importantly, a horse is considered a “pedestrian” under the law. Apparently, the only law you have to consider offending while riding a horse is the offense of jaywalking.

If you are a horseless drinker, however, sooner or later you are bound to be pulled over by a police officer. Sometimes the only hope of avoiding a DUI conviction lies in the hands of the jury. In this situation it is better to have a lawyer who is more lucky than good. Obtaining a sympathetic jury in a DUI case is strictly and operation of the block of the draw. I recall one case, in particular, where I was extremely lucky.

Tina was tall and attractive. She also liked to party. She was driving erratically through the town of Carrabelle, Florida, when she was pulled over. (Carrabelle was made famous in the 80s for having the nation’s smallest police station, a phone booth.) Since Tina was a native of Carrabelle, she knew the arresting officer personally. She accused the officer of sexual harassment. When she was transported to the city hall for the breath test, she refused, still continuing her rant against her unfair arrest. At one point, Tina ripped open her blouse revealing her bare torso and exclaimed something to the effect of “This is what you are really after.” Unfortunately, Tina also had a mixed drink in the console of her vehicle and had spilled alcohol on the front of her clothing. She refused the breath test.

Tina insisted upon a trial. Since the local county judge was away, a circuit judge in Tallahassee presided over the trial. We selected the jury on Monday and tried the case on Tuesday. All of the evidence and testimony went as expected. By early afternoon we had a verdict. Tina was acquitted. After the trial, the judge asked me to give him a ride to St. George Island where he had rented a home for the week. He explained that he had expected to be in court all day and his wife would not return with their vehicle until 5:00 PM. I obliged.

During the 15 min. ride to the Island, the judge commented upon the State’s case and indicated that he had expected a conviction. He wanted to know my opinion regarding the strength of the state’s case. I explained that the State had a good case but that I was simply lucky during jury selection. I had actually represented one of the jurors in a prior case where I was successful in obtaining a dismissal of a felony charge against him. Another juror had been on a prior jury in which I was the attorney. She acquitted my client and I formulated the opinion that she was the type of person who was reluctant to return a verdict of guilty. There was also an elderly woman on the jury who had a vendetta against the Carrabelle Police Department. I felt confident that I had three votes for acquittal even before the trial began.

On more than one occasion, however, the luck of the draw has worked against me. I represented a truck driver charged with DUI in Liberty County. He consented to the breath test, and flunked it. Unfortunately, a DUI conviction would cost him his job. We had no choice but to proceed to trial and hope for the best.

Most DUI attorneys agree that one should avoid religious jurors and teetotaler’s. Liberty County is home to many persons of the Mormon faith who eschew all strong beverages, even iced tea and Coca-Cola. After exhausting my three peremptory challenges, I ended up with two Mormons on the jury. Generally speaking, it is also better to have men on the jury, as opposed to women. After all, men are more likely to be understanding of having a few cold ones after a long day at work. I ended up with six women seated as my jurors.

After selecting the jury on Monday, I returned Tuesday morning for the trial. A photographer from the local newspaper was taking pictures of the jury. I inquired as to the reason why. I was informed that my jury was, in fact, the first all woman jury ever seated in a Liberty County trial. I pondered the possibility that the newspaper would run a front-page story about the trial with a headline: ” First All-Woman Jury Acquits Drunk Driver.” I knew the possibility was far-fetched and was not surprised when they returned a verdict of guilty against my client.

A Loophole for Homeowners?

GORGEOUS — Mon, 06 Jun 2011 17:51:56 +0000

It is often assumed that only wealthy people need worry about the taxation of capital gains. A capital gain, or loss, results from the sale of a capital asset, such as shares of stock. But, a home, farm, or condominium is also a capital asset. The sale of such property can lead to unintended tax consequences. Fortunately for homeowners, Congress has provided a $250,000 exemption from taxation for the sale of a principal residence. Sometimes, however, this exemption is not substantial enough to avoid a tax liability.

Consider the following example:
Grandma and grandpa purchased a home and acreage in 1970 for $40,000. They have added $60,000 in improvements over the years. Their basis in the property, therefore, is $100,000. Fortunately or unfortunately, their home and land is now prime real estate. It is valued at $1 million when grandpa dies. Since the property was jointly owned, grandma is now the sole owner of the real estate. She decides to sell it for $1 million. In general, capital gain is calculated quite simply as the difference between the amount realized and the basis of the property. Does grandma owe capital gains tax on the $900,000 difference?

Although this result may have obtained under the original income tax code, it is no longer the case. A 1976 amendment to the tax code provides that one half of the value of the property, or $500,000, is to be included in grandpa’s estate. This, in turn, means that grandma’s interest in the property is also valued at $500,000 at the time of grandpa’s death. Under a provision added in 1981, grandma benefits from the application of the “stepped-up basis” rule, meaning that her basis in the property is not $100,000, but $500,000. Her gain is now $500,000, of which $250,000 is exempt from taxation. She now has a $250,000 gain upon which a 15% capital gains tax is applied. Her tax bill should be $37,500, right?

Not so fast. This is where the tax loophole comes in. Originally, the tax code provided that 100% of the value of jointly held property was included in the estate of the first to die. Applying this rule, the entire $1 million representing the value of the home and land would’ve been included in grandpa’s estate. Since this could lead to unintended estate tax consequences, Congress decided to amend the law. In 1976, the estate tax law was changed to provide that only one half of jointly held property would be included in the estate of the first spouse to die. Under its terms, the new statute did not apply to interest in property created prior to 1976, unless the taxpayer elected to do so. Then, in 1981, Congress provided that it was not necessary for the taxpayer to make the election. The estate receives the benefit of the 50% exclusion regardless of an affirmative election to receive the benefit. Since grandma and grandpa purchased the property in 1970, they are exempt from the 1976 law. Furthermore, the 1981 law also provided for the stepped-up basis. Application of these statutes leads to a result that seems almost too good to be true.

Since the property was acquired in 1970, 100% of its value was included in grandpa’s estate. Since it was valued at $1 million, grandma’s basis in the property is also $1 million. Since she sold it for $1 million, she realizes no gain, and pays no taxes. Obviously, the IRS has argued that this leads to an absurd result and continues to assess taxes in this situation. Courts, on the other hand, have ruled in favor of taxpayers. Based upon a literal reading of the statutes, it is clear that the correct result has been achieved. Nevertheless, one should seek the advice of a tax expert when dealing with property acquired prior to 1976 that is being sold at a substantial gain. The IRS may claim a tax deficiency for capital gains taxes that you really do not owe.