After today's blockbuster investigative report on Trump's life of crime by the not-so-failing NY Times, CNBC reported that the New York state tax department is investigating the shocking revelations that are being read around the world.The Pulitzer-bait report from David Barstow, Susanne Craig and Russ Buettner has been described as "exhaustive" and "thorough." Imagine what Mueller's office is going to have! They wrote that Señor Trumpanzee "has long sold himself as a self-made billionaire, but a Times investigation found that he received at least $413 million in today’s dollars from his father’s real estate empire, much of it through tax dodges in the 1990s" and that he "participated in dubious tax schemes during the 1990s, including instances of outright fraud, that greatly increased the fortune he received from his parents." Surprised? Shocked? Still wondering how Hillary could have lost to this buffoon? He "won" the election "proclaiming himself a self-made billionaire, and he has long insisted that his racist KKK father "provided almost no financial help." The Times investigation, "based on a vast trove of confidential tax returns and financial records," reveals that Trump received the equivalent today of at least $413 million from his father’s real estate empire, starting when he was a toddler and continuing to this day."
Much of this money came to Mr. Trump because he helped his parents dodge taxes. He and his siblings set up a sham corporation to disguise millions of dollars in gifts from their parents, records and interviews show. Records indicate that Mr. Trump helped his father take improper tax deductions worth millions more. He also helped formulate a strategy to undervalue his parents’ real estate holdings by hundreds of millions of dollars on tax returns, sharply reducing the tax bill when those properties were transferred to him and his siblings.These maneuvers met with little resistance from the Internal Revenue Service, The Times found. The president’s parents, Fred and Mary Trump, 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 then imposed on gifts and inheritances.The Trumps paid a total of $52.2 million, or about 5 percent, tax records show....The Times’ findings raise new questions about Mr. Trump’s refusal to release his income tax returns, breaking with decades of practice by past presidents. According to tax experts, it is unlikely that Mr. Trump would be vulnerable to criminal prosecution for helping his parents evade taxes, because the acts happened too long ago and are past the statute of limitations. There is no time limit, however, on civil fines for tax fraud.What emerges from this body of evidence is a financial biography of the 45th president fundamentally at odds with the story Mr. Trump has sold in his books, his TV shows and his political life. In Mr. Trump’s version of how he got rich, he was the master dealmaker who broke free of his father’s “tiny” outer-borough operation and parlayed a single $1 million loan from his father (“I had to pay him back with interest!”) into a $10 billion empire that would slap the Trump name on hotels, high-rises, casinos, airlines and golf courses the world over. In Mr. Trump’s version, it was always his guts and gumption that overcame setbacks. Fred Trump was simply a cheerleader.“I built what I built myself,” Mr. Trump has said, a narrative that was long amplified by often-credulous coverage from news organizations, including The Times....Fred Trump was relentless and creative in finding ways to channel this wealth to his children. He made Donald not just his salaried employee but also his property manager, landlord, banker and consultant. He gave him loan after loan, many never repaid. He provided money for his car, money for his employees, money to buy stocks, money for his first Manhattan offices and money to renovate those offices. He gave him three trust funds. He gave him shares in multiple partnerships. He gave him $10,000 Christmas checks. He gave him laundry revenue from his buildings.Much of his giving was structured to sidestep gift and inheritance taxes using methods tax experts described to The Times as improper or possibly illegal. Although Fred Trump became wealthy with help from federal housing subsidies, he insisted that it was manifestly unfair for the government to tax his fortune as it passed to his children. When he was in his 80s and beginning to slide into dementia, evading gift and estate taxes became a family affair, with Donald Trump playing a crucial role, interviews and newly obtained documents show.The line between legal tax avoidance and illegal tax evasion is often murky, and it is constantly being stretched by inventive tax lawyers. There is no shortage of clever tax avoidance tricks that have been blessed by either the courts or the I.R.S. itself. The richest Americans almost never pay anything close to full freight. 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, particularly about the value of Fred Trump’s real estate, that repeatedly prevented the I.R.S. from taxing large transfers of wealth to his children.“The theme I see here through all of this is valuations: They play around with valuations in extreme ways,” said Lee-Ford Tritt, a University of Florida law professor and a leading expert in gift and estate tax law. “There are dramatic fluctuations depending on their purpose.”The manipulation of values to evade taxes was central to one of the most important financial events in Donald Trump’s life. In an episode never before revealed, Mr. Trump and his siblings gained ownership of most of their father’s empire on Nov. 22, 1997, a year and a half before Fred Trump’s death. Critical to the complex transaction was the value put on the real estate. The lower its value, the lower the gift taxes. The Trumps dodged hundreds of millions in gift taxes by submitting tax returns that grossly undervalued the properties, claiming they were worth just $41.4 million.The same set of buildings would be sold off over the next decade for more than 16 times that amount.The most overt fraud was All County Building Supply & Maintenance, a company formed by the Trump family in 1992. All County’s ostensible purpose was to be the purchasing agent for Fred Trump’s buildings, buying everything from boilers to cleaning supplies. It did no such thing, records and interviews show. Instead All County siphoned millions of dollars from Fred Trump’s empire by simply marking up purchases already made by his employees. Those millions, effectively untaxed gifts, then flowed to All County’s owners-- Donald Trump, his siblings and a cousin. Fred Trump then used the padded All County receipts to justify bigger rent increases for thousands of tenants.
Our three intrepid reporters, Russ, Susanne and David, also penned a less mind-boggling and complex 11 Takeaways From The Times’ Investigation Into Trump’s Wealth... a kind of Cliff's Notes version.
1- 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’ 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.2- 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’ 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.3- 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.4- 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.5-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.6- 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.7- 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.8- 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’ 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.”9- 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 was briefed on The Times’s findings. “There are dramatic fluctuations depending on their purpose.”Mr. Harder, the president’s lawyer, said: “All estate matters were handled by licensed attorneys, licensed C.P.A.’s and licensed real estate appraisers who followed all laws and rules strictly.”10- After Fred Trump’s death, his empire’s most valuable asset was an I.O.U. from Donald Trump.When Fred Trump died in June 1999 at the age of 93, the vast bulk of his empire was nowhere to be found in his estate-- testament to the success of the tax strategies devised by the Trumps in the early 1990s. The single largest item included in his estate tax return was a $10.3 million I.O.U. from Donald Trump, money his son appears to have borrowed the year before he died. As for the remnants of empire left in Fred Trump’s estate, the tax return cited appraisals that once again grossly understated their market values.As their father’s executors, Donald, Maryanne and Robert Trump were legally responsible for the accuracy of his estate tax return. They were obligated not only to give the I.R.S. a complete accounting of the value of his estate’s assets, but also to disclose all the taxable gifts he had made during his lifetime. If they knew anything was wrong and failed to reveal it, tax experts said, they could be in violation of tax law.Mr. Harder, the president’s lawyer, defended the tax returns filed by the Trumps. “The returns and tax positions that The Times now attacks were examined in real time by the relevant taxing authorities,” he said. “These matters have now been closed for more than a decade.”11- Donald Trump got a windfall when the empire was sold. But he may have left money on the table.In 2003, once again in financial trouble, Donald Trump began engineering the sale of the empire Fred Trump had hoped would never leave the family. The sale, completed in 2004, brought him his biggest payday ever from his father: His cut was $177.3 million, or $236.2 million in today’s dollars. But as it turned out, banks at the time valued the empire at hundreds of millions more than the sale price. Donald Trump, master dealmaker, had sold low.
Is Trump doing the same kinds of shenanigans to funnel money to Fuck-Up, Jr., Eric, Ivanka, Tiffany and Barron? Or the grandchildren? Don't bet against it-- and don't bet that it won't be uncovered. At least wait to see next year when the Democrats are in charge of the House and they subpoena his tax returns. Hey... who knows, maybe he'll resign rather than show them.
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