Appeals court sides with county in Carbon Beach mansion tax fight Play

A billionaire natural gas magnate has lost a major tax battle with the county over the purchase of a Carbon Beach mansion.

A natural gas billionaire and his wife are the apparent losers. They bought a compound on Carbon Beach for $110 million eight years ago. Court documents indicate this house was recorded at a sales price of $36 million in what is called an "off market" purchase.

But the L.A. County tax assessor placed a value of $103 million on the house. At the time, it was the most expensive home sale ever for Los Angeles County.

The California Court of Appeal this week sided with the county tax collector. It ruled that "the purchase price of off market transactions such as this does not presumably govern a house's fair market value for the purpose of assessing taxes."

That is a major finding in tax law — it could set a statewide precedent. The Second District Court of Appeal has set California law as dictating that the purchase price of a house does not automatically dictate fair market value for tax assessments.

No word if the case will be appealed to the state Supreme Court, but it is very rare for a Court of Appeal tax case like this to be overturned.