In 2017, 2018 and 2019, the firm estimated that the sale would trigger millions of dollars in tax liability, based on the partnership’s negative capital account balance and projected corresponding gain realized at sale, AMTAX said. But then CohnReznick created a separate calculation in 2020 for the general partner, according to the complaint. That calculation factored out the taxes by ignoring the negative account balance, AMTAX asserted.
The Boston nonprofit used the new calculation to claim it could purchase the scattered housing units for $17.1 million, AMTAX claimed. When the partnership refused to sell the property, saying the price excluded the money the partnership would need to settle taxes due at sale, the nonprofit sued them in state court for refusing to sell, AMTAX said.
CohnReznick intentionally hid its 2020 calculation, as well as its competing engagement with the general partner, from the partnership, which learned about it during discovery in the state court case, AMTAX contended.
