A real estate transaction setting the stage for a town center development in Delaware wasn’t a sham, relieving the seller of $1.4 million in tax deficiencies and $280,000 in fines, US Tax Court ruled.
Parkway Gravel Inc., a sand and gravel materials firm, and V&N, a real estate development firm, belong to the same family of companies. In 2006, Parkway’s owners began marketing a 58-acre parcel near New Castle, Del., and entered negotiations with another developer. At the same time, V&N began working with local government to rezone the parcel to prepare it for development.
When the Parkway-owned land sold …