Welcome to DU!
The truly grassroots left-of-center political community where regular people, not algorithms, drive the discussions and set the standards.
Join the community:
Create a free account
Support DU (and get rid of ads!):
Become a Star Member
Latest Breaking News
General Discussion
The DU Lounge
All Forums
Issue Forums
Culture Forums
Alliance Forums
Region Forums
Support Forums
Help & Search
This ***** real estate deal looks awfully like criminal tax fraud
Retweeted by the co-author, Bridget Crawford: https://twitter.com/ProfBCrawford
Is it cooler to be in print? Yes. @ProfBCrawford and my article on Trumps Gift Tax problem via @washingtonpost
Link to tweet
This Trump real estate deal looks awfully like criminal tax fraud
Two tax lawyers break down the presidents sale of two condos to his son.
By David Herzig and Bridget Crawford August 4
https://twitter.com/professortax
https://twitter.com/ProfBCrawford
President Trump clearly doesnt want to release his income tax returns to the public. Members of the public and commentators have progressed through stages of outrage, speculation and acceptance that theyll never see the goods, while others have made attempts to pry the documents free (such as proposed legislation in New York and other states that would require presidential candidates to release their returns). But Trumps most pressing tax problem may come from somewhere else entirely: a pre-election transfer of property to a company controlled by his son that could run afoul of the IRS.
According to a recent story by ProPublica and the Real Deal, in April 2016, a limited liability company managed by Trump sold two condominium apartments to a limited liability company managed by Eric Trump. They were on the 13th and 14th floors of a 14-story, full-service, doorman building at 100 Central Park South in Manhattan. This is a prime Midtown neighborhood, yet the sale price for each condo was just $350,000. Although the condition and square footage of apartments 13G and 14G are not readily known, a popular real estate website shows that G-line apartments on both the fifth and eighth floors are one-bedroom, one-bath units of just over 500 square feet. Two years before the Trump transaction, apartment 5G sold for $690,000. Maybe the two units in question were in terrible shape, but two months before the sale to Eric Trumps LLC, they were advertised for $790,000 (on the 13th floor) and $800,000 (on the 14th floor), according to ProPublica.
{Sitting presidents cant be prosecuted. Probably.}
If a sale between a parent and child is for fair market value, it does not trigger a gift tax. But if a parent sells two expensive condominiums to his son at a highly discounted price, for example, then the parent makes a taxable gift in part. In that case, the seller must pay a gift tax of up to 40 percent. (In this case, that might have run the president somewhere in the neighborhood of $350,000.)
....
Since Trump did not cast the transactions as gifts for state and local tax purposes, it is almost certain that he did not do so for federal gift tax purposes, either. In our combined 40 years of experience as tax lawyers, we are unaware of a situation in which a taxpayer would report a transaction as a fair market value between strangers on the state level (and thus incur real estate taxes) but treat it as a gift at the federal level (and thus incur an additional tax). Its fair to infer that Trump didnt follow the rules.
....
Twitter: @professortax
@ProfBCrawford
David Herzig, the Michael and Dianne Swygert Research Fellow at Valparaiso University School of Law, is currently a visiting professor at Loyola Los Angeles School of Law. Follow @professortax
Bridget Crawford is a professor of law at the Elisabeth Haub School of Law at Pace University. Follow @ProfBCrawford
Two tax lawyers break down the presidents sale of two condos to his son.
By David Herzig and Bridget Crawford August 4
https://twitter.com/professortax
https://twitter.com/ProfBCrawford
President Trump clearly doesnt want to release his income tax returns to the public. Members of the public and commentators have progressed through stages of outrage, speculation and acceptance that theyll never see the goods, while others have made attempts to pry the documents free (such as proposed legislation in New York and other states that would require presidential candidates to release their returns). But Trumps most pressing tax problem may come from somewhere else entirely: a pre-election transfer of property to a company controlled by his son that could run afoul of the IRS.
According to a recent story by ProPublica and the Real Deal, in April 2016, a limited liability company managed by Trump sold two condominium apartments to a limited liability company managed by Eric Trump. They were on the 13th and 14th floors of a 14-story, full-service, doorman building at 100 Central Park South in Manhattan. This is a prime Midtown neighborhood, yet the sale price for each condo was just $350,000. Although the condition and square footage of apartments 13G and 14G are not readily known, a popular real estate website shows that G-line apartments on both the fifth and eighth floors are one-bedroom, one-bath units of just over 500 square feet. Two years before the Trump transaction, apartment 5G sold for $690,000. Maybe the two units in question were in terrible shape, but two months before the sale to Eric Trumps LLC, they were advertised for $790,000 (on the 13th floor) and $800,000 (on the 14th floor), according to ProPublica.
{Sitting presidents cant be prosecuted. Probably.}
If a sale between a parent and child is for fair market value, it does not trigger a gift tax. But if a parent sells two expensive condominiums to his son at a highly discounted price, for example, then the parent makes a taxable gift in part. In that case, the seller must pay a gift tax of up to 40 percent. (In this case, that might have run the president somewhere in the neighborhood of $350,000.)
....
Since Trump did not cast the transactions as gifts for state and local tax purposes, it is almost certain that he did not do so for federal gift tax purposes, either. In our combined 40 years of experience as tax lawyers, we are unaware of a situation in which a taxpayer would report a transaction as a fair market value between strangers on the state level (and thus incur real estate taxes) but treat it as a gift at the federal level (and thus incur an additional tax). Its fair to infer that Trump didnt follow the rules.
....
Twitter: @professortax
@ProfBCrawford
David Herzig, the Michael and Dianne Swygert Research Fellow at Valparaiso University School of Law, is currently a visiting professor at Loyola Los Angeles School of Law. Follow @professortax
Bridget Crawford is a professor of law at the Elisabeth Haub School of Law at Pace University. Follow @ProfBCrawford
InfoView thread info, including edit history
TrashPut this thread in your Trash Can (My DU » Trash Can)
BookmarkAdd this thread to your Bookmarks (My DU » Bookmarks)
3 replies, 5215 views
ShareGet links to this post and/or share on social media
AlertAlert this post for a rule violation
PowersThere are no powers you can use on this post
EditCannot edit other people's posts
ReplyReply to this post
EditCannot edit other people's posts
Rec (8)
ReplyReply to this post
3 replies
= new reply since forum marked as read
Highlight:
NoneDon't highlight anything
5 newestHighlight 5 most recent replies
This ***** real estate deal looks awfully like criminal tax fraud (Original Post)
mahatmakanejeeves
Aug 2017
OP
Yep, rich people like to fund their deadbeat children's lifestyle and not pay taxes.
Hassin Bin Sober
Aug 2017
#3
Not Ruth
(3,613 posts)1. Is that how gift tax works?
Very informative
Hassin Bin Sober
(26,340 posts)3. Yep, rich people like to fund their deadbeat children's lifestyle and not pay taxes.
I run in to it from time to time in the mortgage business.
Enorgnoz
(8 posts)2. Can you imagine if HRC didn't release her tax returns?
It continues to baffle me how so many voters could be so convinced that she was corrupt based on how she made her money, but don't even care to see how this fool makes (or keeps) his money. Most middle/lower-class Republicans don't even see tax evasion as theft from the treasury, as theft from the American People - just smart business.