#Trump May Owe $100 Million From #DoubleDip Tax Breaks, Audit Shows
A previously unknown focus of an #IRS audit is a dubious accounting maneuver that effectively meant taking the same write-offs twice on his #Chicago skyscraper.
The 92-story, glass-sheathed skyscraper along the #Chicago River is the tallest &, at least for now, the last major construction project by #Trump. Through a combination of cost overruns & the bad luck of opening in the teeth of the Great Recession, it was also a vast money #loser.
But when Trump sought to reap #tax benefits from his losses, the #IRS has argued, he went too far & in effect wrote off the same losses twice.
The first write-off came on Trump’s #tax return for 2008. With sales lagging far behind projections, he claimed that his investment in the condo-hotel tower met the tax code definition of “worthless,” because his #debt on the project meant he would never see a profit. That move resulted in #Trump reporting losses as high as $651 million for the year, The Times & ProPublica found.
There is no indication the #IRS challenged the initial claim,…that lack of scrutiny surprised #tax experts…. But in 2010, #Trump & his tax advisers sought to extract further benefits from the #Chicago proj, executing a maneuver that would draw yrs of inquiry from the IRS. First, he shifted the company that owned the tower into a new partnership.…like moving coins from one pocket to another. Then he used the shift as justification to declare $168M in additional losses over the next decade.
…reporting by NYT & ProPublica about the #Chicago tower reveals a 2nd component of Trump’s quarrel w/the #IRS. This account was pieced together from a collection of public docs, including filings from the NYAG’s suit against #Trump in 2022, a passing reference to the audit in a congressional rpt that same yr & an obscure 2019 IRS memo that explored the legitimacy of the accounting maneuver. The memo did not identify Trump, but the docs, along w/tax records…indicated Trump was the focus.
…The outcome of #Trump’s dispute could set a precedent for #wealthy people seeking #tax benefits from the laws governing partnerships. Those #laws are notoriously complex, riddled with uncertainty & under constant assault by lawyers pushing boundaries for their clients. The #IRS has inadvertently further invited aggressive positions by rarely auditing partnership tax returns.
Beyond the 2 episodes under audit, reporting by The NYTimes in recent years has found that, across his business career, #Trump has often used what experts described as highly aggressive — & at times, legally suspect — accounting maneuvers to avoid paying #taxes. To the 6 #tax experts consulted for this article, Trump’s #Chicago accounting maneuvers appeared to be questionable & unlikely to withstand scrutiny.
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