The Tax Strategy & Charitable Givings of Madoff Ponzi Scheme Victim Marlene Krauss

As the deadline for filing income taxes draws near, Marlene Krauss’ accountant is no doubt working overtime tallying up her many tax deductions.  For starters, some of the interest on her mortgage payments (in Sept. 2007, she acquired a mortgage of $4,207,500 on the penthouse with a 6.87% interest rate) is probably tax deductible.   (Being poor Bohemians, we don’t know how to calculate this.  Luckily for Marlene, her accountant probably does.)

First, the good news: Marlene donated $2,300 to Obama’s campaign. Hooray!  Let’s hear it for change!  But what’s that you say: campaign contributions are not deductible?  Sorry Marlene.  Well, maybe Michelle will invite you to lunch or something.

One of Marlene’s most interesting gifts was for an energy-efficient solar-powered home designed by students at Cornell University.   Krauss won the house at auction, paying $151,000 to Cornell. (It wasn’t really worth that much, you see, and the auction was just a fun way to donate money).  “I really wanted to show my thanks to Cornell for all that it has done for my family,” Krauss said.  What Cornell did, I suppose, was to educate Marlene (though they should have required an ethics class), and, more recently, to admit her daughter into their undergraduate program.

Marlene also says that she “hopes to donate the house to Cornell University.”  What we wonder is, if she deducts all or part of the $151,000 as a charitable donation, can she also deduct the price of the house when she gives it back?  Would that be double-dipping?  Once again, only her accountant knows for sure! 

Marlene’s most surprising charitable involvement is her work with Community Access, an organization which provides housing for people with mental handicaps.  (Gee, sounds like the Chelsea.)  We don’t know how much, if any, money they donated, but Krauss and her husband, Zach Berk both serve on the organization’s “Good Neighbor Gala” committee.  The Good Neighbor Gala will be held on Wednesday, May 20, at NYU and will celebrate the 35^th Anniversary of Community Access.  Maybe you can still get tickets.  If so, say hi to Marlene and Zack for us.

Given her involvement in Community Access, isn’t it a bit ironic that her running dog, David Elder, signed an affidavit stating that the reason he and Krauss fired hoteliers Richard Born and Ira Drukier was because they hadn’t evicted enough tenants from the Hotel? 

If Marlene is so interested in providing housing, why doesn’t she stop evicting people from the Chelsea Hotel. -- Ed Hamilton