May 21, 2024
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From Propublica – IRS Audit of Trump Could Cost Former President More Than $100 Million

Trump wrote off the losses… twice. That’s illegal

The audit represents yet another potential financial threat — albeit a more distant one — for Trump, the Republicans’ presumptive 2024 presidential nominee. In recent months, he has been ordered to pay $83.3 million in a defamation case and an additional $454 million in a civil fraud case brought by the New York attorney general, Letitia James. Trump has appealed both judgments. (He is also in the midst of a criminal trial in Manhattan, where he is accused of covering up a hush-money payment to a porn star in the weeks before the 2016 election.)Beyond the two episodes under audit, reporting by the Times in recent years has found that, across his business career, Trump has often used what experts described as highly aggressive — and at times, legally suspect — accounting maneuvers to avoid paying taxes. To the six tax experts consulted for this article, Trump’s Chicago accounting maneuvers appeared to be questionable and unlikely to withstand scrutiny.“I think he ripped off the tax system,” said Walter Schwidetzky, a law professor at the University of Baltimore and an expert on partnership taxation.

P.S. Trump doesn’t give a hoot about pollution. and fudged other numbers about river water

P.P.S. Have to add that I went to Chicago on vacation last year and the Trump tower stuck a big ugly Trump sign on their building facing into the river. Wow, talk about spoiling the view.

So THAT’S Why He Hid His Tax Returns

As an initial matter, let’s agree that the IRS should have investigated Trump’s huge $651 million “worthless” write-off that he made in 2008. Was the project really worthless? After all, Trump was trying to claim a write-off for losing someone else’s money long before that money actually was lost. And Trump was still selling condo units after that “worthless” declaration, even though the money the sales brought in didn’t cover his mounting construction costs. So was the Chicago tower really “worthless” in 2008? That’s already pretty questionable.  

But what he did in 2010 is even more dubious and likely illegal, and it did become the subject of a decade-plus long IRS inquiry. For no apparent reason other than to cook the books, Trump took the entity that owned the Chicago tower and merged it into a new entity, DJT Holdings. That new company also owned many of his other properties, including his golf course resorts. Within that new holding company, Trump went on to report another $168 million in losses from the Chicago Tower—the same one that supposedly was “worthless.”

See the problem here? Something can’t be both “worthless” and get written off for taxes, and then later be worth something and entitle the owner to further write-offs. In short, Trump double dipped. He deducted $168 million from nothing.

And that likely illegal maneuver allowed Trump to avoid paying federal taxes later, even as he spread out his income from forgiven loans over many years.

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