Tranquillus in Exile
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Trump reaped millions from his father’s real estate empire all his life
In Trump’s version of how he got rich, he was the master dealmaker who broke free from his father’s “tiny” real estate operation and built a $10 billion empire. But The Times investigation makes clear that at every stage of his life, his finances were deeply entwined with and dependent on his father’s wealth. By age 3 he was receiving $200,000 a year. He was a millionaire by age 8. In his 40s and 50s he was receiving more than $5 million a year from his father..
There was a clear pattern to this: when his son began expensive new projects, Fred Trump increased his help. In the late 1970s, when Donald crossed the river into Manhattan - converting the old Commodore Hotel 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.
In all, The Times documented 295 distinct streams of revenue that Fred Trump created over five decades to channel wealth to his son.
Fred Trump 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 companies dramatically increased their payouts.
Tax records reveal that at the peak of Trump’s financial distress, in 1990, his father extracted nearly $50 million from his empire. The Times could find no evidence that Fred Trump made any significant debt payments, charitable donations or personal expenditures. He needed a pile of cash in case Donald had to be dug out of another hole.
A case of this occurred at the Castle casino, where an $18.4 million bond payment was due in December 1990. Fred dispatched a trusted bookkeeper to Atlantic City to buy $3.5 million in casino chips without placing a bet. With this lifeline - an illegal loan under New Jersey gaming laws - Donald narrowly avoided defaulting on the bond.
The Trumps turned loan debt into legally questionable tax write-offs
In December 1987, records show, Fred Trump spent $15.5 million to buy a 7.5 percent stake in Trump Palace, his son’s condo tower on the Upper East Side. Four years later, tax returns and financial statements show, Fred sold that stake for just $10,000. The buyer, other documents show, was his son.
According to tax experts, that would constitute a multimillion-dollar gift under IRS rules. But Fred Trump’s tax returns show no such gift. What they do show is that he used the transaction to declare an enormous tax write-off. That appears to violate federal tax law which prohibits deducting a loss from the sale of property between family
members. The purpose, of course, is to stop people doing, well, what the Trumps did.
After Fred Trump’s death, his empire’s most valuable asset was an IOU from Donald Trump
When Fred Trump died in June 1999, the 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 IOU from Donald Trump, money his son appears to have borrowed the year before he died.
In 2003, once again in financial trouble, Donald Trump began arranging the sale of the remnants of his father's real estate empire. The sale, completed in 2004, brought him his biggest payday ever from his father: His cut was $177.3 million ($236.2 million in today’s money). But as it turned out, banks at the time valued the empire at hundreds of millions more than that. Donald Trump, master dealmaker, had sold low.
The full report is here (it's LONG):
https://www.nytimes.com/interactive/2018/10/02/us/politics/donald-trump-tax-schemes-fred-trump.html
Two likely responses
"It's fake news."
Yet, despite his usual threats, Trump DID NOT SUE when this "defamatory" report was published just over a year ago. Why was that, do you think?
"All really wealthy people do the same."
Maybe. But Trump's whole myth is that he's a self-made billionaire who did it all on a measly $1 million loan which he repaid with interest. He's lying bigly. Without his father's wealth he would be a two-bit grifter, more likely to be in jail than in the White House.
In Trump’s version of how he got rich, he was the master dealmaker who broke free from his father’s “tiny” real estate operation and built a $10 billion empire. But The Times investigation makes clear that at every stage of his life, his finances were deeply entwined with and dependent on his father’s wealth. By age 3 he was receiving $200,000 a year. He was a millionaire by age 8. In his 40s and 50s he was receiving more than $5 million a year from his father..
There was a clear pattern to this: when his son began expensive new projects, Fred Trump increased his help. In the late 1970s, when Donald crossed the river into Manhattan - converting the old Commodore Hotel 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.
In all, The Times documented 295 distinct streams of revenue that Fred Trump created over five decades to channel wealth to his son.
Fred Trump 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 companies dramatically increased their payouts.
Tax records reveal that at the peak of Trump’s financial distress, in 1990, his father extracted nearly $50 million from his empire. The Times could find no evidence that Fred Trump made any significant debt payments, charitable donations or personal expenditures. He needed a pile of cash in case Donald had to be dug out of another hole.
A case of this occurred at the Castle casino, where an $18.4 million bond payment was due in December 1990. Fred dispatched a trusted bookkeeper to Atlantic City to buy $3.5 million in casino chips without placing a bet. With this lifeline - an illegal loan under New Jersey gaming laws - Donald narrowly avoided defaulting on the bond.
The Trumps turned loan debt into legally questionable tax write-offs
In December 1987, records show, Fred Trump spent $15.5 million to buy a 7.5 percent stake in Trump Palace, his son’s condo tower on the Upper East Side. Four years later, tax returns and financial statements show, Fred sold that stake for just $10,000. The buyer, other documents show, was his son.
According to tax experts, that would constitute a multimillion-dollar gift under IRS rules. But Fred Trump’s tax returns show no such gift. What they do show is that he used the transaction to declare an enormous tax write-off. That appears to violate federal tax law which prohibits deducting a loss from the sale of property between family
members. The purpose, of course, is to stop people doing, well, what the Trumps did.
After Fred Trump’s death, his empire’s most valuable asset was an IOU from Donald Trump
When Fred Trump died in June 1999, the 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 IOU from Donald Trump, money his son appears to have borrowed the year before he died.
In 2003, once again in financial trouble, Donald Trump began arranging the sale of the remnants of his father's real estate empire. The sale, completed in 2004, brought him his biggest payday ever from his father: His cut was $177.3 million ($236.2 million in today’s money). But as it turned out, banks at the time valued the empire at hundreds of millions more than that. Donald Trump, master dealmaker, had sold low.
The full report is here (it's LONG):
https://www.nytimes.com/interactive/2018/10/02/us/politics/donald-trump-tax-schemes-fred-trump.html
Two likely responses
"It's fake news."
Yet, despite his usual threats, Trump DID NOT SUE when this "defamatory" report was published just over a year ago. Why was that, do you think?
"All really wealthy people do the same."
Maybe. But Trump's whole myth is that he's a self-made billionaire who did it all on a measly $1 million loan which he repaid with interest. He's lying bigly. Without his father's wealth he would be a two-bit grifter, more likely to be in jail than in the White House.