Something strange happened the day Angela Alsobrooks, the Democratic nominee for Maryland's open Senate seat, obtained the Washington, D.C., home at the center of an ongoing property tax scandal.
As Alsobrooks tells it, she received the home from her grandmother in November 2003, when the senior became too old to live alone. Alsobrooks, who now serves as county executive of Prince George's County, Md., never lived in the property and instead rented it out until she sold it in 2018. Throughout all those years, the Senate candidate improperly claimed tax exemptions on the property meant only for seniors and primary residents of the district—costly errors that landed Alsobrooks a $47,500 bill for back taxes and interest earlier late September.
But Washington, D.C., property records obtained by the Washington Free Beacon show there's more to the story. Those records indicate Alsobrooks took greater lengths to avoid paying her fair share of taxes beyond claiming tax exemptions for which she was ineligible. And when Alsobrooks took out a $130,000 mortgage on the property after she secured it in her name, she appears to have failed to follow through on a requirement to use it as her primary residence.
Alsobrooks's grandmother, Lelia Bright, owned the home when the sun rose on Nov. 29, 2003, the day Alsobrooks took over ownership of the property. But Alsobrooks didn't obtain the property from her grandmother. She obtained it from her mother, Patricia Alsobrooks.
That day, Bright transferred the property to Patricia Alsobrooks, the records show. Minutes later, the mother transferred the home to Angela Alsobrooks. The curious paperwork maneuver is commonly referred to as a two-step transfer, and according to Washington, D.C., real estate attorney Randy Weiss, it appears to have spared Alsobrooks from roughly $4,000 in property transfer taxes that she otherwise would have owed to the district if she obtained the home directly from her grandmother.
That's because property transfers from grandparent to grandchild were not exempt from Washington, D.C., transfer taxes at the time Alsobrooks obtained the home. Property transfers from grandparents to grandchildren have only been tax-free in Washington, D.C., since the passage of a 2005 law, which took effect well over a year after Alsobrooks obtained her home in the district.
But property transfers from parent to child were exempt from those taxes at the time Alsobrooks obtained the home. By using her mother as an intermediary, she appears to have sidestepped Washington, D.C.'s 2.2 percent transfer and recordation taxes on the home, which the district assessed at $180,000 in 2005, according to Nexis.
"When Alsobrooks transferred the deeds in Washington D.C., she appears to have improperly took exemptions from transfer and recordation taxes saving herself thousands of dollars," said Weiss, who reviewed the documents after being contacted by the Free Beacon.
Weiss explained that Alsobrooks should have waited far longer than a day—one year being the rule of thumb—between the transfers in order to comply with tax requirements. But the Alsobrooks family performed the dual transfers on the same day, which means that D.C. tax authorities should have seen that she effectively obtained the home directly from her grandmother and imposed the proper taxes, the attorney said.
"If you can't do something directly, you shouldn't do it indirectly to get around it," Weiss said. "The general rule by most practitioners is if you want to send it from grandmother to daughter and then daughter to granddaughter, you need to wait a year and a day. We call it seasoning between the two deeds, otherwise the tax collector will collapse the transaction and treat it as improper."
"And Alsobrooks did that," Weiss said. "She should have known. Because why else would she do it the very same day, seconds apart?"
Washington, D.C., tax authorities issued Alsobrooks a $47,500 bill for back taxes and interest on the property, stemming from her improperly claiming tax exemptions meant for primary residents of the district and senior citizens. The bill could have been higher, but the district agreed to Alsobrooks's request to waive a 10 percent penalty and forgave 25 percent of the interest she had accrued on her back taxes, WJLA reported.
A spokeswoman for the D.C. Office of Tax and Revenue told WJLA that Alsobrooks made "an error … when she originally recorded the deed" for the home. It's unclear if the error in question is Alsobrooks's two-step transaction with her grandmother and mother or if the transaction were factored into the bill the district issued to Alsobrooks in October. The spokeswoman did not return a request for comment.
The ongoing tax scandal has been a thorn in Alsobrooks's side ever since CNN reported the initial allegations in late September. The Maryland Democrat says that if she's elected to the Senate, she will push for a "fairer tax system," and she has criticized tax breaks for wealthy Americans. The campaign of her Republican opponent, former governor Larry Hogan, said it is "deeply disturbing that Angela Alsobrooks thinks the rules don't apply to her."
The potential issues stemming from Alsobrooks's district home extend beyond her creative paperwork maneuvering. Alsobrooks took out a $130,000 mortgage on the property in May 2004, about half a year after she obtained the home. The terms of that mortgage, according to records obtained by the Free Beacon, required Alsobrooks to make the property her primary residence within 60 days.
But according to Alsobrooks, she never resided at the property. Voting records show she has lived in Prince George's County since 2000, and she has told the press she rented out the D.C. property when she owned it. If she had told the mortgage company she didn't plan on using the property as her primary residence, she might have received a less advantageous loan.
"It is proven that the number of foreclosures on principal residences is miniscule to those for second residences," Weiss said. "As a result, lenders not only give you better credit terms, they process your loan faster."
Federal authorities have a history of aggressively prosecuting Maryland politicians who commit mortgage fraud. In May, a federal judge sentenced former Baltimore City state's attorney Marilyn Mosby, a Democrat, to 12 months of home confinement in part for making a false mortgage application.
WJLA also reported Friday that Alsobrooks didn't maintain a rental license for the property for 10 of the 15 years it was on the rental market, a violation that the outlet said could result in additional fines upward of $16,000.
"This is all Larry Hogan and these billionaires who are becoming more desperate by the day. And it's just a new attack every day, and they're becoming very desperate," Alsobrooks told a WJLA reporter on Friday when asked why she didn't maintain a rental license.
The Alsobrooks campaign did not return a request for comment.