Try again Sun-Sentinel

The Fort Lauderdale newspaper has another article on embattled Broward County sheriff Ken Jenne.

Broward County Sheriff Ken Jenne did not report on his income tax returns the 2001 sale of a Lake Worth condominium for $20,000, his financial records show.

Jenne reported another real estate sale but did not disclose the condo transaction on federal tax returns he filed through 2004, a South Florida Sun-Sentinel investigation has found. His 2005 return has not been released publicly.

The omission is the latest in a series of revelations about Jenne's finances. Federal and state investigators began looking into his personal and public business dealings more than a year ago.

Jenne's attorney, Dave Bogenschutz, said Tuesday he had no information about the condo transaction and would have to ask Jenne.

Forensic accountant Lewis Freeman of Miami, who reviewed Jenne's tax returns for the Sun-Sentinel, said the sale should have been reported.

"It's an asset that is owned by an individual, and the tax law requires it," he said. "If there was no gain, it still should have been reported."

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Jenne inherited the property from an aunt, Evelyn Proctor, who died in 1990, according to Palm Beach County records. Jenne reported that he collected $4,800 in rent on the property in 2000 and listed its value as $25,000, his financial records show. In November 2001, Jenne sold the condo to James E. Watson for $20,000, according to the deed.

Under IRS rules, proceeds from the sale of rental properties are considered a capital gain and are taxed at about 15 percent. Records do not indicate how much Jenne earned on the deal but he could have owed up to $3,000 in taxes.

The sale came when Jenne, a former state senator who gave up a lucrative law practice to be sheriff, was liquidating assets and taking on loans and mortgages. The Sun-Sentinel reported Sunday that since taking the job in 1998, Jenne increased his personal debt by $119,000 and cashed out more than $427,000 in assets by selling stocks, property and taking money out of his bank accounts, his financial records show.

I've done income taxes since the late 80's. The forensic accountant is right, Jenne was supposed to report the sale on his tax return.

The Sun-Sentinel however is wrong in saying Jenne could owe up to $3,000 in back taxes. That would only happen if the property was valued at $0 when Jenne inherited it. It certainly wasn't, so Jenne's tax burden I'm guessing is somewhere in between Zero and $2,250(That's putting a value of $5,000 on the property back in 1990. That I think is a safe minimum estimate. Then couldn't the Sentinel check with the property appraiser's ofice for the value in 1990?) assuming he made a gain. The value at the day he inherited the property would be the figure used to determine his capitol gain. The way real estate has been soaring here in Florida, he almost certainly made some type of gain.

This could all be an innocent mistake, either by Jenne or his accountant. I've seen my share of these happen. Jenne is up to his neck in trouble right now, to not report something to the IRS would seem foolish. Then people have been doing that as long as there have been income taxes.

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