The Real Deal New York

Zamir to pay $1.1M in settlement over wrongful 1031 tax deferral

AG says developer "wrongfully deferred" state and city taxes through "like-kind" exchange
March 22, 2016 12:15PM

Eric Schneiderman

Eric Schneiderman (credit: Department of Justice)

The New York state Attorney General’s office has reached a $1.1 million settlement with real estate developer Asher Zamir for wrongfully deferring state and city income taxes through a federal 1031 property exchange, the agency announced Tuesday.

A whistleblower investigation found that Zamir, whose legal name is Asher Roshanzamir, “wrongfully deferred payment of New York state and local income taxes” by disguising roughly $3.5 million in cash withdrawals through a “like-kind” 1031 exchange and also disguising around $5 million in “equity contributions” as loans, the AG’s office said.

Zamir, who heads real estate acquisition and investment firm Zamir Equities, came under investigation after a whistleblower filed a complaint in New York State Supreme Court, prompting state Attorney General Eric Schneiderman’s office to look into the matter.

The AG found that Zamir wrongfully used a “‘drop and swap’ section 1031 like-kind exchange of real estate properties” – which enables a seller to defer paying income taxes on certain capital gains through a separate real estate acquisition transaction – to defer payment of the state and local taxes in question.

“There has to be one set of rules for everyone, no matter how rich or how powerful, and that includes big developers paying their fair share of taxes,” Schneiderman said in a statement.

Zamir has faced his share of legal battles in the past – most notably a string of litigation revolving around Zamir’s interest in a 10-story office-and-retail building at 587 Fifth Avenue in Midtown. Zamir also teamed with fellow investor Kent Swig several years ago to dispute the pair’s stake in 44 Wall Street in the Financial District. – Rey Mashayekhi