Is Derek Jeter's Tampa Mansion a Tax Shelter?

derek jeterDerek Jeter has just completed building the biggest home in Tampa, Fla.'s Hillsborough County, reported Tampa Bay Online. At a whopping 30,875 square feet, 7 bedrooms and 9 bathrooms, the home (pictured below) not only dwarfs the New York Yankees star's other homes in Manhattan and North Tampa, as well as those of his new neighbors on Bahama Circle in Davis Islands, but it also provides a continued reason for him not to pay New York City income taxes.

The mansion spans three waterfront lots that this 2000 Most Valuable Player purchased in 2005 and 2006 for about $7.7 million, before spending another hefty amount razing the existing homes and countless more millions paying the construction company, the architect, the landscaper and everyone in between that it takes to complete such a massive home. And court records show this love interest of Friday Night Lights actress Minka Kelly and former beau of Mariah Carey didn't obtain a mortgage to build the home.

As a result, it's difficult to put a true value on the property (let alone his net worth), especially given the economy.

"He bought the land at the height of the market," says Jeanne Wolfe, a Tampa Realtor who covers Davis Islands, which she says is an eclectic mix of homes ranging in value from $300,000
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to $6 million. Although the value of the land he purchased may have declined some since he purchased it, over all, Wolfe told AOL Real Estate, this town of 16,000 people "has held its value because it is across the bridge to downtown, less than five minutes to downtown Tampa."

Still, "Derek Jeter is taking us to a new level," she said.

Tampa-based J.O. DeLotto & Sons Inc. was the general contractor for the two-story house, according to Hillsborough public records, which lists Kered Connors LLC as the owner of the property ("Kered" is "Derek" spelled backwards) and Jeter as its "sole member." The signature on legal documents related to the property is Jeter's father, S. Charles Jeter.

Architect Gary Hancock of Winter Park Design, which designed the home, told Tampa Bay Online that the design is English Manor style, with lots of gables and stonework.

Exactly why the shortstop is building such a large home, which Tampa Bay Online describes as being the size of a Best Buy store, is unknown. There has been some speculation that Jeter, who this fall signed a three-year, $51 million Yankees contract, might not opt for his fourth-year $8 million option in 2014 because he was angry at how public the Yankees made the negotiations.

"This was a negotiation that was supposed to be private," Jeter told ESPN. "I'd be lying if I said I wasn't angry how some of this went."

The Yankees are said to have offered $45 million over three years, while Jeter allegedly sought about $125 million for five years, reported Business Insider. Although New Yorkers would not want to see "The Captain" leave their beloved Yankees, some others south along the Atlantic Ocean are hoping otherwise. Some Floridians would like to see Jeter sign with the Tampa Bay Rays, to give the team "relevancy." But don't hold your breath.

Jeter, who was raised in Michigan, has maintained a Tampa residence ever since 1994 when he began playing for the Class-A Advanced Tampa Yankees, which is the High-A affiliate of the New York Yankees major league club. For the past few years he has listed his primary residence as a $1 million home at 17005 Candeleda De Avila in north Tampa at the gated Avila Golf & Country Club, where he holds his annual Derek Jeter Celebrity Golf Classic. (The 8th one just completed two weeks ago). That 4,493-square-foot home is not on the market, says Wolfe, who adds that she checked last week.

Jeter also maintains homes in Marlboro, NJ, Greenwood Lake, NY, and an apartment in Manhattan's Trump World Tower, the latter of which is currently on the market, as we reported in "Is Derek Jeter's NYC Apartment Worth $20 Million." (See pictures below.)

But Tampa is where Jeter has called home for nearly two decades. And that's exactly what he told the New York State Department of Taxation and Finance when it alleged in 2008 that Jeter should have paid state income tax from 2001 to 2003, reported the New York Daily News. It was 2001 when Jeter purchased his 5,426-square-foot Trump place for $12.6 million. So, Jeter countered that during that time period he was really a resident of Florida, where there is no state income tax. He eventually resolved his tax issue privately in 2008, then put the co-op on the market... still without a taker.

"People need to be careful when they are employed in New York, but own homes in other states," says Burton Spears, a CPA and tax principal at the accounting firm Mengel, Metzger, Barr & Co. in Rochester, NY, who himself owns a home in more than one state. "Each state has its own rules for determining a taxpayer's domicile, or 'home' state for tax purposes. Generally you are required to pay taxes in your home state, as well as in each state you earn income. Care must be taken to avoid the situation where more than one state claims you are a resident of their state, resulting in double taxation."

And if you have an abode New York City, while collecting pay there one just may have to pay city taxes too. Given the number of multiple-state homeowners or New York City renters who collect a New York paycheck, but have tried to escape paying the approximately 4 percent New York city income taxes, New York auditors in recent years have investigated hundreds of the super-wealthy, so-called New Yorkers. The state even recently hired nearly a couple hundred new auditors to pursue tax filers, says the Daily News.

"New York is quirky in that way," New York real estate attorney Ed Mermelstein told AOL Real Estate. "They are always trying to recapture that income."

People even have to swear under oath on tax forms as to how many days they spend in New York City. If it's more than 183 days and the filer has a residence in the city, the tax bill goes up. A filer who lies could face fraud charges and open the door to more extensive audits.

"If you spend one minute of one day here, and you have an abode here, it counts," says William Abrams, a NY real estate attorney with Abrams Garfinkel Margolis Bergson, LLP.

By trying to unload his New York apartment, AOL Real Estate speculates that Jeter is making it even clearer to the auditors that he is not a New York City resident. And perhaps by building in Tampa such a large home -- one that will have two three-car garages, a grand entertainment room, a billiards room and a memorabilia room, surrounded by a 6-foot wall and 4-foot fence, he is shouting that fact from wall to wall.

Since the baseball season is 162 days long, and some of those days are spent out of state at away games, the 36-year-old ladies man could easily come in under that quota, with a few extra days back in town to hang with whoever his honey.

"People who know they are on the edge [of going over the maximum days allowed] are really careful," says Abrams, who adds that the burden of proof that they did not exceed those approximately six months in state. To be certain, keep a record, Abrams says. "Phone records, EZ Pass, train records," be prepared to show where you were every single day if you have a home in New York and collect a paycheck there but think you don't meet the requirements to pay income taxes to the Big Apple.

Derek Jeter's New Tampa Mega-Mansion

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Sheree R. Curry, who has owned three homes and now rents in a Minneapolis suburb, is a three-time, award-winning journalist who has covered real estate for six years. During her 20-year career, her articles have appeared regularly in the Wall Street Journal, TV Week, and Fortune. She's been with AOL Real Estate since 2009 and seeks a book publisher -- or at least a lender who'll give a reasonable mortgage rate to a self-employed mom.
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