Amazon’s expansion plans could trigger new real estate laws
A New York senator wants to ban what he calls “insider dealing” in the real estate market, much like the prohibitions already in place on stocks and bonds.
Q. Is it true that Amazon is being sued because a bunch of its employees started buying up homes in New York and Virginia before the company announced that it had selected those two states for its two new headquarters facilities?
A. There haven’t been any lawsuits filed at the time of this writing. However, the real estate frenzy that followed the technology giant’s plan to build two new massive facilities on the East Coast about eight weeks ago could eventually lead to new government legislation that would essentially ban “insider trading” in the housing market in much the same way that the Securities and Exchange Commission outlaws the buying and selling of stocks based on previously undisclosed information on Wall Street.
Real estate prices in and around both Long Island City, New York, and Crystal City, Virginia, began rising at an extraordinarily fast pace in the months before Amazon made the announcement that those two cities had won a nationwide competition for [the company’s] new facilities. Each facility will create tens of thousands of jobs and increase housing demand, pushing property values even higher.
Suspicions that some kind of “fix” was underway gathered steam when The Wall Street
Journal recently reported that several Amazon employees were shopping for homes in the Long Island City area well before the company announced plans to build there. Many of these employees already had purchases under contract, the newspaper said.
Amazon released a statement that any employees who made a property purchase in either New York or Virginia before the announcement did not have “any advanced knowledge of the location selections.”
But New York state Sen. Michael Gianaris, a Democrat who represents Long Beach City and surrounding areas, has already begun drafting legislation that would prohibit what he calls “insider dealing” in most types of real estate transactions.
“Trading on insider information is illegal with securities and should be illegal with real estate,” Gianaris said. “No one should be cashing in on confidential information.”
The senator hopes to introduce the bill in the New York Legislature next month. If approved, violators would be subject to a felony conviction and up to four years in prison.
Passage of the measure could prompt other states to adopt similar laws and perhaps even encourage Congress to approve a nationwide prohibition on insider dealing in real estate transactions.
Q. What is the oldest house in America? A. It depends on how you define the term “house.”
The four-story Taos Pueblo in New Mexico, built of earthen adobe bricks, was started by Native Americans about 1,000 years ago as both a housing and business center. It’s technically not a singular building — numerous changes were made over the following 450 years or so — but part of it still houses dozens of Puebloans.
The oldest known wood-frame home in America is believed to be the Fairbanks House in Dedham, Massachusetts. Built by Puritan colonist Jonathan Fairbanks for his wife and six children in 1637, it housed eight generations of the family over the course of 268 years. The structure is now a “house museum,” listed on the National Register of Historic Places and open to the public several months out of the year.
Q. We recently bought some new furniture and a few other big-ticket items for our home because we hosted our respective parents and some other relatives for the holidays. Now we would like to donate our old stuff to charity in the hope that we will have enough deductions to itemize our federal tax return next year. If we do so, would we need to get a written receipt for all these items? And for tax purposes, how would we estimate how much all this stuff is worth?
A. You will have to base the deduction on the property’s “fair market value,” such as the price the items might fetch at a thrift shop or perhaps on eBay. You can also find a list of approximate values for dozens of household goods that are commonly donated on The Salvation Army’s website, www.satruck.org.
You will only need a receipt or other type of written acknowledgement from the charity if the value of goods you donate is $250 or more. But if you plan on donating antiques or art that you believe is worth more than $5,000, you will also need to get a written appraisal.
For more information, get your free copy of IRS Form No. 8283, Noncash Charitable Contributions, by calling the agency at 800-829-3676 or by downloading the form at www.irs.gov.
ABOUT LIVING TRUSTS
David Myers’ booklet “Straight Talk About Living Trusts” explains how even low- and middle-income homeowners can now reap the same benefits that creating an inexpensive trust once provided only to the wealthiest families.
For a copy, send $4 and a self-addressed, stamped envelope to D. Myers/Trust, P.O. Box 4405, Culver City, CA 90231-2205. Net proceeds will be donated to the American Red Cross. Send questions to David Myers, P.O. Box 4405, Culver City, CA 90231-2960, and we’ll try to respond in a future column.