New York investigates bombshell report that Donald Trump got $413 million from father, much from tax dodges
The New York Times investigation, which the White House said was ‘misleading’ showed Trump received the equivalent today of at least US$413 million from his father’s real estate business
The New York state tax department said it was investigating reports that US President Donald Trump helped his parents dodge millions of dollars in taxes and received far more money from his father’s real estate empire than he has claimed in the past.
Earlier, The New York Times said its own exhaustive probe of a vast trove of tax returns and confidential records showed Trump had engaged in suspect tax tactics, including “outright fraud” that greatly inflated the funds he received from his parents.
Trump has stated on numerous occasions that he received little help from his father, New York property developer Fred Trump, in building his fortune.
“The Tax Department is reviewing the allegations in the NYT article and is vigorously pursuing all appropriate avenues of investigation,” New York state Taxation and Financing spokesman James Gazzale said.
The Failing New York Times did something I have never seen done before. They used the concept of “time value of money” in doing a very old, boring and often told hit piece on me. Added up, this means that 97% of their stories on me are bad. Never recovered from bad election call!
— Donald J. Trump (@realDonaldTrump) October 3, 2018
Trump slammed the newspaper on Wednesday in a tweet: “The Failing New York Times did something I have never seen done before. They used the concept of “time value of money” in doing a very old, boring and often told hit piece on me. Added up, this means that 97% of their stories on me are bad. Never recovered from bad election call!”
The Times said Trump received the equivalent of US$413 million in today’s dollars from his father’s real estate activities - having earned US$200,000 a year in today’s dollars by age three. By age eight, he was already a millionaire.
Trump was receiving the equivalent of US$1 million a year from his father shortly after his college graduation, it added, noting that the funds grew to more than US$5 million per year when he was in his 40s and 50s.
The Times said the bulk of the funds owed to tax evasion tactics that Trump helped devise, including a “sham corporation” he and his siblings created to hide millions of dollars in gifts from their parents.
There were also millions of dollars in improper tax deductions and Trump helped further reduce his parents’ tax bill by undervaluing their real estate holdings by hundreds of millions of dollars on tax returns, according to The Times.
The newspaper said Trump’s parents, Fred and Mary Trump, who died respectively in 1999 and 2000, transferred more than US$1 billion in wealth to their five children.
This could have produced a tax bill of at least US$550 million but the Trumps paid a total of just US$52.2 million, The Times said, citing tax records.
One of Trump’s lawyers, Charles Harder, decried the newspaper’s allegations as “100 per cent false, and highly defamatory.”
“There was no fraud or tax evasion by anyone. The facts upon which The Times bases its false allegations are extremely inaccurate,” he added.
“President Trump had virtually no involvement whatsoever with these matters.”
Harder insisted the matter was mostly handled by other relatives who relied “entirely” upon licensed professionals to “ensure full compliance with the law.”
The White House, meanwhile said that “Many decades ago, the IRS reviewed and signed off on these transactions.”
Spokeswoman Sarah Sanders instead shifted blame onto The Times itself, saying “Perhaps another apology from The New York Times, like the one they had to issue after they got the 2016 election so embarrassingly wrong, is in order.”
The Times said Trump’s tax-hating father used various methods to funnel his wealth to his children and shield it from the Internal Revenue Service, some of which tax experts said was improper or possibly illegal.
Among the tactics, Fred Trump gave ownership of most of his real estate empire to his children a year and a half before his death.
The properties were valued at just US$41.4 million although they were sold off over the next decade for more than 16 times that amount, it said.
The Times said Trump got a cut of US$177.3 million, or US$236.2 million in today’s dollars, from the sale.
Breaking with the practice of past presidents, Trump has refused so far to release his tax returns.
Citing tax experts, The Times said Trump was unlikely to face criminal prosecution for helping his parents evade taxes but could face civil fines for tax fraud if the matter is pursued by the authorities.
Additional reporting by Bloomberg and Associated Press