The origins of President Donald Trump‘s real estate empire are now under investigation, following a bombshell New York Times article published Tuesday claiming the Trump family avoided more than half a billion dollars in taxes.
The newspaper published a 15,000-word investigative report alleging Trump participated in “dubious tax schemes” and “instances of outright fraud” throughout the 1990s. In summary, the report claims Fred and Mary Trump transferred more than $ 1 billion in wealth from their empire of more than 27,000 New York City apartments to their children, including Donald Trump. Such a transfer would have normally created $ 550 million in gift and inheritance taxes.
To minimize tax bills, Fred Trump made his children stakeholders in a shell company, All County Building Supply & Maintenance, and then marked up the price of purchases for Trump properties in order to channel the excess money as gifts. The report also claimed that, when Trump and his siblings gained ownership of his father’s empire in 1997, they submitted tax returns vastly undervaluing the properties in order to further lower tax bills.
In the end, such schemes allowed the Trumps to pay just over $ 50 million in taxes, or just 5 percent of what such transfers would have typically required. Trump himself received at least $ 413 million in today’s money from his father.
Such a bombshell report does more than contradict Trump’s frequent claims of getting a $ 1 million loan from his father and growing it into a self-made real estate empire; it also raises major questions regarding the legitimacy of the Trumps’ real estate wealth.
On the same day, New York’s Department of Taxation and Finance announced that it is reviewing the claims made in the article. Because the state of New York has no statute of limitations on civil tax cases, the case could potentially find that the Trump family owes decades’ worth of unpaid taxes.
“The Tax Department is reviewing the allegations in The New York Times article and is vigorously pursuing all appropriate avenues of investigation,” James Gazzale, a spokesman for New York’s Department of Taxation and Finance, said in a statement to the press.
The White House and Trump Organization ignored request for comment on the investigation from multiple outlets while Trump lawyer Charles Harder denied the allegations.
“There was no fraud or tax evasion by anyone,” he said in a statement to the press. “The facts upon which the Times bases its false allegations are extremely inaccurate.”
Trump, meanwhile, published a tweet not specifically denying the findings of the NYT but calling the article a “very old, boring and often told hit piece on me.”
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