It's unclear where the NY Times got its hands on the financial records of the President's father and his company (if it really did), but the Times is now using those records to claim all sorts of dubious things.
1. Supposedly, President Trump got over $400 million from his father, or so says the Times and the many other outlets that repeat the story. It's important to note, though, that it really isn't $400 million plus; that's the supposed current value of what he got. The number is much lower even if you accept the Times' premise; they just pumped it up due to inflation to make it look larger.
2. Supposedly, President Trump and his siblings got buildings from their father that were worth much more than the value used in filing estate and gift tax returns. The Times calls this tax fraud. It's not. Indeed, it's not even close. When the President's father died, his estate was audited by the IRS. That means that the IRS checked to confirm the values used on the estate tax return. I haven't seen the estate tax return, but you can be certain that the return was filed along with appraisals by real estate professionals for each property. That is standard practice for estate attorneys. The same would be true of gift tax returns filed prior to the father's death.
The Times claims that the values used by the Trump family were only about 10% of the actual market value and points out that most of the buildings sold for many times more than the value on the return about a decade later. That's not unusual in the New York real estate market. Look at the example of Olympia and York. They bought about ten office buildings in Manhattan in the late 1970s for roughly 300 million dollars. By five years later, the same buildings were worth about $4 billion. In 1980, the Seagrams building on Park Avenue was sold for roughly 90 million in an auction. By ten years later, that same building was valued at more than 1.5 billion dollars. Residential real estate has moved in wild fluctuations as well. There are many people who bought properties and sold them a few years later for five or ten times the purchase price. It's impossible to value NYC real estate based upon where the price was ten years earlier.
3. Another charge made by the Times is that the President and his siblings helped his father defraud the IRS by organizing a business to pad the bills paid by the father's company through the 1990s with false charges. This let the father transfer the cash without paying gift taxes, supposedly. But think about that for a moment. Let's assume that the President got $5 million dollars from this alleged scam. That $5 million would come to the President most likely as ordinary income. That means he paid 38% federal income tax, about 10% state tax and about 6% city income tax on the money. That's roughly a 50% tax rate. If the father had just gifted the money to his children, the gift tax would have been 45% and there would have been no income tax paid by the President and his siblings. That's a lower overall rate.
I don't know where the Times got its info, and I cannot determine the details that underlie some of the broad charges the paper levels, but I do know this: much of what the paper says is wrong, even silly.
1. Supposedly, President Trump got over $400 million from his father, or so says the Times and the many other outlets that repeat the story. It's important to note, though, that it really isn't $400 million plus; that's the supposed current value of what he got. The number is much lower even if you accept the Times' premise; they just pumped it up due to inflation to make it look larger.
2. Supposedly, President Trump and his siblings got buildings from their father that were worth much more than the value used in filing estate and gift tax returns. The Times calls this tax fraud. It's not. Indeed, it's not even close. When the President's father died, his estate was audited by the IRS. That means that the IRS checked to confirm the values used on the estate tax return. I haven't seen the estate tax return, but you can be certain that the return was filed along with appraisals by real estate professionals for each property. That is standard practice for estate attorneys. The same would be true of gift tax returns filed prior to the father's death.
The Times claims that the values used by the Trump family were only about 10% of the actual market value and points out that most of the buildings sold for many times more than the value on the return about a decade later. That's not unusual in the New York real estate market. Look at the example of Olympia and York. They bought about ten office buildings in Manhattan in the late 1970s for roughly 300 million dollars. By five years later, the same buildings were worth about $4 billion. In 1980, the Seagrams building on Park Avenue was sold for roughly 90 million in an auction. By ten years later, that same building was valued at more than 1.5 billion dollars. Residential real estate has moved in wild fluctuations as well. There are many people who bought properties and sold them a few years later for five or ten times the purchase price. It's impossible to value NYC real estate based upon where the price was ten years earlier.
3. Another charge made by the Times is that the President and his siblings helped his father defraud the IRS by organizing a business to pad the bills paid by the father's company through the 1990s with false charges. This let the father transfer the cash without paying gift taxes, supposedly. But think about that for a moment. Let's assume that the President got $5 million dollars from this alleged scam. That $5 million would come to the President most likely as ordinary income. That means he paid 38% federal income tax, about 10% state tax and about 6% city income tax on the money. That's roughly a 50% tax rate. If the father had just gifted the money to his children, the gift tax would have been 45% and there would have been no income tax paid by the President and his siblings. That's a lower overall rate.
I don't know where the Times got its info, and I cannot determine the details that underlie some of the broad charges the paper levels, but I do know this: much of what the paper says is wrong, even silly.
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