Fake news at it again.
Donald J. Trump built a business empire and won the presidency proclaiming himself a self-made billionaire, and he has long insisted that his father, the legendary New York City builder Fred C. Trump, provided almost no financial help. “I built what I built myself,” the president has repeatedly said.
But an investigation by The New York Times has revealed that Donald Trump received the equivalent today of at least $413 million from his father’s real estate empire. What’s more, much of this money came to Mr. Trump through dubious tax schemes he participated in during the 1990s, including instances of outright fraud, The Times found.
In all, the president’s parents transferred well over $1 billion in wealth to their children, which could have produced a tax bill of at least $550 million under the 55 percent tax rate on gifts and inheritances that was in place at the time. Helped by a variety of tax dodges, the Trumps paid $52.2 million, or about 5 percent, tax returns show.
The president declined requests over several weeks to comment for this article.
A lawyer for Mr. Trump, Charles J. Harder, provided a written statement. “There was no fraud or tax evasion by anyone. The facts upon which The Times bases its false allegations are extremely inaccurate,” he said. “President Trump had virtually no involvement whatsoever with these matters,” he continued, saying the president had delegated those tasks to relatives and tax professionals. “The affairs were handled by other Trump family members who were not experts themselves and therefore relied entirely upon the aforementioned licensed professionals to ensure full compliance with the law.”
In a statement on behalf of the Trump family, the president’s brother, Robert Trump, said, “All appropriate gift and estate tax returns were filed, and the required taxes were paid.”
Since Donald Trump first refused to release his income tax returns, his campaign and then his presidency have been suffused with questions about the extent and sources of his wealth, questions that have only intensified with the Russia investigation. The Times’s new reporting reveals little about his recent business dealings. But the investigation — based on a vast trove of confidential tax returns and financial records, and at more than 13,000 words one of the longest investigative articles ever published in The Times — offers the first comprehensive examination of the inherited fortune and tax dodges that guaranteed Mr. Trump a gilded life.
Here are some key takeaways.
The Trumps’ tax maneuvers show a pattern of deception, tax experts say
The line between legal tax avoidance and illegal tax evasion is often murky, and there is no shortage of clever tax-avoidance tricks that have been blessed by either the courts or the Internal Revenue Service itself; the wealthiest Americans rarely pay anything close to full freight. The Trumps’ tax maneuvers met with little resistance from the I.R.S., The Times found.
But tax experts briefed on The Times’s findings said the Trumps appeared to have done more than exploit legal loopholes. They said the conduct described here represented a pattern of deception and obfuscation that repeatedly prevented the I.R.S. from taxing large transfers of wealth to Fred Trump’s children.
Donald Trump began reaping wealth from his father’s real estate empire as a toddler
In Donald Trump’s version of how he got rich, he was the master dealmaker who broke free from his father’s “tiny” Brooklyn and Queens real estate operation and built a $10 billion empire that would slap the Trump name on hotels, high-rises, casinos and golf courses the world over.
But The Times’s investigation makes clear that in every era of Mr. Trump’s life, his finances were deeply entwined with, and dependent on, his father’s wealth. By age 3, he was earning $200,000 a year in today’s dollars from his father’s empire. He was a millionaire by age 8. In his 40s and 50s, he was receiving more than $5 million a year.
There was a clear pattern to this largess: When his son began expensive new projects, Fred Trump increased his help. In the late 1970s, when Donald Trump crossed the river into the glittering precincts of Manhattan — converting the old Commodore Hotel near Grand Central Terminal into a Grand Hyatt — his father opened a spigot of loans. When he made his first forays into Atlantic City casinos a few years later, his father devised a plan to sharply increase the flow of aid.
That ‘small loan’ of $1 million was actually at least $60.7 million — much of it never repaid
In Mr. Trump’s books and TV shows and on the campaign trail, a central trope of his self-mythology has been that, as he began building his own empire, the only financial help he got from his father was a $1 million loan. Not only that: “I had to pay him back with interest.”
In fact, The Times found, Fred Trump lent his son at least $60.7 million, or $140 million in today’s dollars. Much of it was never repaid, records show.
Fred Trump wove a safety net that rescued his son from one bad bet after another
As the 1980s ended, Donald Trump’s big bets began to go bust — Trump Shuttle, the Plaza Hotel, the Atlantic City casinos. But as he careened from one financial disaster to another, family partnerships and companies dramatically increased their payouts.
Between 1989 and 1992, four of the entities that Fred Trump created paid his son today’s equivalent of $8.3 million. And when Donald Trump pleaded with bankers for an emergency line of credit, he used as collateral the stake his father had given him in a group of apartment buildings.
Tax records also reveal that at the peak of Mr. Trump’s financial distress, in 1990, his father extracted an extraordinary sum — nearly $50 million — from his empire. While The Times could find no evidence that Fred Trump made any significant debt payments, charitable donations or personal expenditures, there are indications that he wanted plenty of cash on hand to bail out his son if need be.
That was what happened at Trump’s Castle casino, where an $18.4 million bond payment was due in December 1990. Fred Trump dispatched a trusted bookkeeper to Atlantic City with checks to buy $3.5 million in casino chips without placing a bet. With this ruse — an illegal loan under New Jersey gaming laws, resulting in a $65,000 civil penalty — Donald Trump narrowly avoided defaulting on his bonds.
The Trumps turned an $11 million loan debt into a legally questionable tax write-off
By 1987, Donald Trump’s loan debt to his father had grown to at least $11 million. Had Fred Trump simply forgiven the debt, his son would have owed millions in income taxes. They found another solution — one that appears to constitute both an unreported multimillion-dollar gift and an illegal tax write-off.
That December, records show, Fred Trump spent $15.5 million to buy a 7.5 percent stake in Trump Palace, his son’s condo tower rising on the Upper East Side of Manhattan. Four years later, tax returns and financial statements show, Fred Trump sold that stake for just $10,000. The buyer, other documents indicate, was his son.
According to tax experts, with Trump Palace condos selling briskly, selling shares worth $15.5 million to your son for a mere sliver of that would constitute a multimillion-dollar gift under I.R.S. rules. But Fred Trump’s tax returns show no such gift to Donald Trump. What they do reveal is that he used the transaction to declare an enormous tax write-off. That appears to violate federal tax law that prohibits deducting any loss from the sale or exchange of property between family members.
In all, Fred Trump dodged roughly $8 million in gift taxes and $5 million in income taxes on the transaction.
Father and son set out to create the myth of a self-made billionaire
All told, The Times documented 295 distinct streams of revenue Fred Trump created over five decades to channel wealth to his son.
But the partnership between Donald Trump and his father was about more than the pursuit, and the preservation, of riches. They were also confederates in a more ambitious project: creating the myth of Donald J. Trump, Self-Made Billionaire. If Fred Trump was the silent partner, helping finance the accouterments of wealth, it was Donald Trump who spun them into a seductive narrative.
Emblematic of this dynamic is Trump Tower, the talisman of privilege that established Donald Trump as a player in New York. Fred Trump’s money helped build it. His son recognized and exploited its iconic power as the primary stage for both “The Apprentice” and his presidential campaign.
Donald Trump tried to change his ailing father’s will, setting off a family reckoning
In December 1990, Donald Trump sent his father a document that left him both angered and alarmed. It was a codicil seeking to make a variety of changes to Fred Trump’s will. Among them: strengthening provisions that made Donald Trump sole executor of his estate. But amid Mr. Trump’s financial shambles — it was the month of the $3.5 million Trump’s Castle rescue — Fred Trump feared that the document potentially put his life’s work at risk, that his son might use the empire as collateral to save his own failing businesses, according to depositions given years later during a family dispute.
Fred Trump rebuffed the maneuver, refusing to sign the codicil. But the episode prompted a family reckoning: Fred Trump was aging and ailing. Without speedy intervention, he could die leaving a vast estate — not just his real estate empire, but also tens of millions of dollars in cash — vulnerable to the 55 percent inheritance tax.
So with Donald Trump playing a central role, the family formulated a plan that included unorthodox tax strategies that experts told The Times were legally dubious and, in some cases, appeared to be fraudulent.
The Trumps created a company that siphoned cash from the empire
The first major component was creating a company called All County Building Supply & Maintenance. On paper, All County was Fred Trump’s purchasing agent, buying everything from boilers to cleaning supplies. But All County was, in fact, a company only on paper, records and interviews show — a vehicle to siphon cash from Fred Trump’s empire by simply marking up purchases already made by his employees. Those millions in markups, effectively untaxed gifts, then flowed to All County’s owners — Donald Trump, his siblings and a cousin.
Lee-Ford Tritt, a leading expert in gift and estate tax law at the University in Florida, said the Trumps’ use of All County was “highly suspicious” and could constitute criminal tax fraud. “It certainly looks like a disguised gift,” he said.
All County also had an insidious downside for Fred Trump’s tenants. He used the padded invoices to justify higher rent increases in rent-regulated buildings, records show.
Mr. Harder, the president’s lawyer, disputed The Times’s reporting: “Should The Times state or imply that President Trump participated in fraud, tax evasion or any other crime, it will be exposing itself to substantial liability and damages for defamation.”
The Trump parents dodged hundreds of millions in gift taxes by grossly undervaluing the assets they would pass on
With the cash flowing out of Fred Trump’s empire, the Trumps began transferring ownership of the lion’s share of the empire itself to Donald Trump and his siblings. The vehicle they created to do that was a special kind of trust called a grantor-retained annuity trust, or GRAT.
The purpose of a GRAT is to pass wealth across generations without paying the 55 percent estate tax. The Trump parents did have to pay gift taxes based on one crucial number: the market value of Fred Trump’s empire. But The Times found evidence that they dodged hundreds of millions of dollars in gift taxes by submitting tax returns that grossly undervalued the assets placed in two GRATs, one for each parent.
Fred Trump’s 1995 gift tax return claimed that the 25 apartment complexes and other properties in the trusts were worth just $41.4 million. The implausibility of this claim would be made plain in 2004, when banks valued that same real estate at nearly $900 million.
“They play around with valuations in extreme ways,” said Mr. Tritt, the tax law expert, who
Except for Baron he is even worse
The US economy has rejoiced since the removal of the Obama Yolk. Best overall outlook in decades.
Link: https://www.cnbc.com/2018/10/02/feds-powell-sees-remarkably-positive-outlook-for-economy.html
Go through all the public tax filings of all family members of a candidate, and have an expert analyze them for things the expert would have done differently (if the expert had a different tax strategy than the filers themselves), and then publicize the discrepancies, and then have the IRS investigate. It is brilliant.
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list of judges in 2016. Only Kav wasn't on the initial list! He was added after some vacancies. This twitter thread shows how she and the media are now whitewashing this lie.
She is a full-blown liar and architect of a smear campaign against a good man. The Democrats should be ashamed of themselves. They should pay in November.
There are some truly gullible people on this Board who will believe anything. They have a limitless capacity to be wrong.
Link: https://twitter.com/kerpen/status/1044963251656830977
Poor delicate female. When she speaks in that trembling, high pitched voice and sounds like she'd have a hard time tying her shoes, she just HAS to be believed regardless of how many witnesses - including her best friend- contradict her.
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Less onerous and smarter regulation. Record tax revenue. But let's talk about Trump's father's taxes? Wow, they have full-blown TDS.
Your Manosphere logic just pivoted from Ford's credible testimony and a nation soured on Kavanaugh's nomination. Your post is a little too obvious.