[ad_1]
A powerhouse couple whose fleet of superyachts have hosted the likes of Jennifer Lopez and Kim Kardashian are being investigated by the IRS over a boat donation that led to a $4.6million tax bill.
Miami socialites J.R. and Loren Ridinger made the multimillion-dollar donation in 2016 – parting with the 116-foot Utopia II after 17 years of sailing the recognizable vessel in the scenic waters of Biscayne Bay.
Thinking the donation would save them about $2 million in taxes, the pair gifted the mega-yacht to Massachusetts-based Veterans Inc, claiming a $4.9million deduction based on an outside estimate of the yacht’s value, according to court filings.
Two New York attorneys – one of whom lived in the same Manhattan building as the Ridingers – provided that estimate, and created a limited-liability company to buy the yacht from the charity, for $4.9million, immediately after the donation.
The lawyers sold the boat a year later for $1.3 million, allowing the charity – whose board includes one of the Manhattan attorneys – $130,000 from that transaction, issuing a promissory note that gave the charity just a 10 percent administrative fee.
The IRS soon got involved, alleging that J.R. – a retail tycoon who died suddenly last September at age 72 – knew that the boat was not worth the amount listed on tax returns.
Miami socialites J.R. and Loren Ridinger made the multimillion-dollar donation in 2016 – parting with the 116-foot Utopia II after 17 years of sailing the recognizable vessel
Thinking the donation would save them about $2 million in taxes, the pair gifted the mega-yacht to Massachusetts-based Veterans Inc, claiming a $4.9million deduction based on an outside estimate of the yacht’s value, according to court filings
The Ridingers have since paid $3.5million in taxes and penalties, and are suing their former lawyers for misrepresenting the yacht’s value, and misleading them into a transaction the couple says ultimately benefited only them.
The saga started in 1999, when the couple’s marketing empire, Market America, first began to take off, earning them tens of millions of dollars as well as socialite status in the local Florida scene.
At that point, the high-powered pair bought the boat in question – the Ridingers’ second ship in an expanding fleet that would eventually host some of Hollywood’s biggest names.
The steel-hulled Feadship yacht was christened the Utopia II – but within a few years, the couple were already looking for an upgrade.
Seeking more space to accommodate their increasingly A-list friends, the family purchased the 151-foot Utopia III – the same boat where Lopez, 53, would celebrate her 43rd birthday, and where Kardashian and Kanye West would share a passionate kiss on July 4, 2015.
In 2016 – a year in which the couple reported and adjusted gross income of more than $36 million – the Ridingers again shelled out the big bucks for another over-the top boat, a sleek 207-footer that they would name Utopia IV.
Seeking more space to accommodate their increasingly A-list friends, the family decided on making the donation after purchasing the 151-foot Utopia III
The boat – which sank in 2021 after crashing into a 160-foot gas tanker near the Bahamas – cost the couple more than $40 million.
At that point, the couple decided it was time to part with the aging Utopia II – which already had been on the market for the better part of decade for $5.4million.
After failing to attract a buyer, the Ridingers decided to gift the boat as charitable donation – thinking that they would get a tax break for their troubles.
At first, the couple considered donating the boat II to AMIkids Inc., a charity known for accepting yachts – a somewhat unusual donation considering the luxury ships’ inherent extravagance.
The Utopia III has been rented out to the likes of Kim Kardashian and Kanye West, pictured here sharing a passionate kiss on the vessel on July 4, 2015
Jennifer Lopez showed off her bikini body on the Ridingers’ Utopia III in Miami in January 2013
However, that plan soon changed, a lawsuit filed by 53-year-old Loren and her husband’s estate, when a Manhattan-based lawyer who lived a dozen floors below the Ridingers named Rachel Gould caught wind of the looming transaction.
After speaking to Gould, the couple decided to to ditch their deal with AMIkids and instead donate to Veterans, a charity, based in Worcester.
Gould’s legal partner Ralph Stone, who also represented the Ridingers over the course of the donation, currently serves on the charity’s advisory council. Records show the charity, founded in 1990, had never before excepted a donation of a yacht – nor has it since.
The Ridingers have since paid $3.5million in taxes and penalties, and are suing their former lawyers, Ralph Stone and Rachel Gould, for misrepresenting the yacht’s value, and misleading them into a transaction the couple says ultimately benefited only them
The Utopia IV a $51 million yacht, owned by JR Ridinger struck and sunk a gas tanker owned by Maritime Management in the Bahamas on Christmas Eve, 2021
The attorneys, according to the Ridingers suit, proceeded to create a limited-liability company to buy the yacht from the charity for the aforementioned $4.9 million immediately after the donation.
At the time, the Ridingers said, the Manhattan lawyers issued the charity a promissory note that promised the agreed-upon sum – which the attorneys said they arrived at after receiving estimates from unnamed outside parties – instead of cash.
The charity then assigned the note to a production company called Killer Impact, which was co-founded by Gould to make socially responsible films and other largely progressive projects.
An agreement reached between the two companies saw Killer Impact agree to continue to create projects aligned with its charitable purpose – while Veterans Inc would eventually get a 10 percent administrative fee of any future sale.
At first, the couple considered donating the boat II to AMIkids Inc., a charity known for accepting yachts. The transaction came under scrutiny by the IRS who said the family inflated the boat’s value on tax returns
Jennifer Lopez, who celebrated her birthday on a Ridigner yacht in 2013, sat next to Lorin at JR’s funeral in October. Lorin filed the lawsuit against her former lawyers a few weeks later. It is sill making its way through federal court
The lawyers soon sold the boat the next year for $1.3 million – a fraction of the previously arrived $4.9 million.
The charity would then receive their agreed upon $130,000 – coming under the IRS’s radar in the process.
Assessing the boat’s worth at $1.5 million, the federal agency audited Ridinger, alleging he knew the Utopia II was not worth the $4.9million sum listed on his tax returns.
What’s more, after examining the boat donation, the agency demanded $6.2million in taxes and penalties from the Ridingers for 2016 and 2017 over the inflated sum and other supposed issues on the returns.
One of those issues, court documents show, include whether the yacht was used for Market America business.
In response, Lorin and her husband’s estate challenged the IRS in tax court, while filing a lawsuit against their former attorneys, alleging they provided the couple with ‘improper, self-interested and unsound legal advice’ regarding the donation.
The IRS, menahwile, contend that the late Ridinger, along with Gould and Stone, ‘planned a fraudulent transaction.’
The real estate tycoon, who died at 72, was also publicly mourned by Kardashian, who also attended the socialite’s memorial in Miami in October
Through their lawyer, both Gould and Stone contend that the Ridingers’ lawsuit is meritless.
The Ridingers hace settled with the IRS over the transaction, agreeing to pay $3million in back taxes and $450,000 in penalties in July – avoiding any fraud penalties in the process.
By then, the Ridingers had also donated the Utopia III to another charity, this one with a history of accepting boats, before moving on to its $51million Utopia IV.
That boat too came under scrutiny, after becoming the subject of not one, not two, but three bitter legal battles, the first of which came after the Ridinger family sued the family that manufactured the vessel in 2019.
The since settled suit claimed technical flaws caused the boat – which would eventually crash into an oil tanker two years later – to ‘toss uncontrollably, inciting crew panic, damaging major equipment onboard and ripping furniture and fixtures off their floor mountings, and shattering glass on various surfaces.’
Kim and sister Kourtney are seen aboard the Utopia III during a stay in Miami in March 2010
The suit was eventually settled for an undisclosed sum out of court.
Then, in August 2021, after investor Ron Conway chartered the boat for 11 days for almost $600,000, he too sued the vessel, claiming the Ridingers were negligent and left staff ill-equipped.
The suit alleged that he injured his knee while trying to disembark from the boat in Martha’s Vineyard, causing U.S. Marshals to arrest the yacht. WIthin days, Market America paid $3 million to reclaim the yacht in November 2021.
The next month, while leaving for the Bahamas to pick up a new set of charter guests, the boat crashed into and sank a 160-foot gas tanker near the Bahamas on Christmas Eve.
Former crew members on the boat have since sued the Ridinger estate, claiming they were injured in the crash and haven’t been paid or had medical bills covered in accordance with the law – allegation the Ridingers have denied.
The Utopia IV has since been towed back to the U.S. for repairs. A lawyer for the Ridingers has said any issues with the boat has been addressed.
Then, this August, a month after reaching a settlement with, Ridinger suffered a pulmonary embolism and died.
Lopez and her husband, Ben Affleck, sat next to Lorin Ridinger at the tycoon’s October funeral, after which he was also publicly mourned by Kardashian.
Lorin filed the lawsuit against her former lawyers a few weeks later. It is sill making its way through federal court. Utopia IV, meanwhile, is on the market for $48 million.
[ad_2]
Source link
