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Monday, March 08, 2021 10:59:44 PM
THE PRESIDENT’S TAXES
How Trump Maneuvered His Way Out of Trouble in Chicago
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=159152386
On reading this from google it didn't look familiar to me but searched the title anyway, and surprise. Thanks to Doc for exposing the title.
It's all so damn complex with fingers and lines going everywhere. Surely they would eat spaghetti at least a few times while working on this stuff, as it must be hard for them to find where these super-wealthy crooks, mistakenly or not, cross the line. That's where the fork must go.
To the end of the article.
Turning Unpaid Debt Into Canceled Debt
Why didn’t the lenders seize the building?
Going to court to take over the unfinished skyscraper promised to be a costly, yearslong process, especially given Mr. Trump’s reputation for using the legal system to drag out fights and grind down opponents. It seemed simpler to resolve the dispute.
On July 28, 2010, lawyers for Mr. Trump, Deutsche Bank and Fortress notified the court that they had reached a private settlement. The terms weren’t disclosed.
But Mr. Trump’s federal tax returns, as well as loan documents filed in Cook County, Ill., provide clues to what happened: Mr. Trump was let off the hook for about $270 million. It was the type of generous financial break that few American companies or individuals could ever expect to receive, especially without filing for bankruptcy protection.
Before Mr. Trump defaulted, Fortress had expected to receive more than $300 million from his company: the $130 million in principal and roughly $185 million in anticipated interest and fees.
But Fortress and its partners — including Mr. Mnuchin’s Dune Capital, as well as Cerberus Capital Management, whose co-chief executive, Stephen A. Feinberg, would become a major Trump fund-raiser and go on to lead a White House advisory panel — quickly realized they wouldn’t ever collect that full amount.
Ultimately, Fortress settled for $48 million, which Mr. Trump wired to the firm in March 2012, according to people familiar with the deal.
The forgiven debts showed up in Mr. Trump’s tax returns. For 2010, Mr. Trump’s 401 Mezz Venture reported about $181 million in canceled debts. Two years later, DJT Holdings, an umbrella company that the Chicago project had been folded into, reported that another $105 million of debt had been forgiven. Most of that appears to reflect the unpaid Fortress sum.
In many ways, it repeated a pattern that had played out more than a decade earlier at Mr. Trump’s Atlantic City casinos: a cycle of defaulting on debts and then persuading already-burned lenders to cut him a break.
The Last $99 Million
Mr. Trump’s companies got a pass on the money they owed on the Deutsche Bank loan, too.
The 2010 settlement gave Mr. Trump a couple of years to sell hotel units, condos and parking spaces to repay that loan, according to Steven R. Schlesinger, a lawyer who represented the Trump Organization in the Chicago litigation.
By 2012, the Trump Organization had drummed up about $235 million to repay the financial institutions to whom Deutsche Bank had sold pieces of the original loan. They included banks and asset managers in the United States, Germany, Ireland and China, according to court records.
But Mr. Trump still owed $99 million, according to people familiar with the debt. Where would he come up with that money?
Though Deutsche Bank had vowed to do no more business with Mr. Trump, his son-in-law, Jared Kushner, introduced him to his personal wealth manager at the bank, Rosemary Vrablic. Ms. Vrablic, with the support of her superiors, soon agreed to restart the relationship with Mr. Trump.
Rosemary Vrablic, Jared Kushner’s personal wealth manager at Deutsche Bank, helped restart the lender’s relationship with
Mr. Trump. Michael Nagle
In 2012, Ms. Vrablic’s division made two loans secured by the Chicago skyscraper: one for nearly $54 million, another for $45 million, according to loan documents filed with the Cook County Recorder of Deeds. Mr. Trump agreed to personally guarantee the new loans, according to several people familiar with the deal.
The funds were used to immediately repay the $99 million that Mr. Trump still owed on the original Chicago loan, the people said. In other words, one wing of Deutsche Bank was providing Mr. Trump the money to repay another division of the same bank.
The following spring, the Trump Organization repaid $54 million, according to a person briefed on the matter and Cook County records. That left $45 million outstanding. But in 2014, Deutsche Bank agreed to lend another $24 million on the property and to extend the due date until 2024, records show. Mr. Trump now owed the bank $69 million. By May 2016, he had repaid the $24 million.
At that time, the Chicago loans were only one element of the relationship between Deutsche Bank and Mr. Trump. Ms. Vrablic’s team also lent Mr. Trump’s company $125 million for work on his Doral golf resort in Florida and up to $170 million to transform the Old Post Office building in Washington into a luxury hotel. Mr. Trump personally guaranteed those loans, too.
The guarantees were advantageous for him. Because they counted as investments in his business for tax purposes, the guarantees increased the amount of losses he could use to avoid income taxes in the future. Mr. Trump’s federal tax returns show that he has personally guaranteed the repayment of $421 million in debts.
Most of that is on loans from Deutsche Bank. At the end of 2018, Mr. Trump and his companies owed the bank $330 million.
Whittling Down Tax Bills
The I.R.S. requires taxpayers to treat forgiven debts as income when calculating what they owe in federal taxes. The New York attorney general, Letitia James, is investigating whether Mr. Trump followed the law.
The tax records reviewed by The Times show that while Mr. Trump accounted for $287 million of income from his canceled debts, he managed to avoid paying income taxes on nearly all of it.
Mr. Trump reported $40 million of forgiven debt as income in 2010. But losses from his businesses — including $30.8 million in red ink on the Chicago project — meant he had no taxable income that year.
Despite drawing new business from its connection to the president, the property would continue to fall short, with retail space sitting empty
and profits plummeting. Alyssa Schukar for The New York Times
Mr. Trump avoided immediate income taxes on another $104.8 million of the forgiven loans in a way that could increase his taxes later. He would generally have been entitled to write off the total amount he spent on a building over a number of years, a process known as depreciation. Instead, he agreed to reduce those eventual write-offs by $104.8 million, an alternative allowed in tax law.
For the other $141 million, Mr. Trump took advantage of a law, passed after the 2008 financial crisis, that allowed income from canceled debts to be deferred for five years and then spread out over the next five. Each year from 2014 through 2018, Mr. Trump declared $28.2 million of canceled-debt income.
As it turned out, though, losses in other parts of his business wiped out most of his federal tax bill on that income. He paid nothing for 2014; $641,931 for 2015; and, after credits, only $750 a year for 2016 and 2017. It isn’t clear how much he paid for 2018.
Loans Coming Due
Like Mr. Trump’s other properties, the Trump International Hotel & Tower in Chicago has benefited in some ways from its connection to the president.
Last year, for example, an aviation company that was lobbying the Trump administration for contracting work held an event there. Mr. Trump attended an October 2019 lunch fund-raiser at the hotel, which generated about $100,000 in revenue for his company, The Washington Post reported.
But the skyscraper’s fortunes have withered. Most of its retail space has never been occupied, The Real Deal reported last year. Its revenue declined from $67 million in 2014 to $50 million in 2018, while profits plunged from $16.3 million to $1.8 million over the same period.
The problems intensified in 2020, as the coronavirus forced restaurants, including Mr. Trump’s in Chicago, to close. The Trump family sought financial relief from Deutsche Bank among others.
The bank offered to let Mr. Trump’s companies pause interest payments on their loans. The Trump Organization decided the bank’s proposal was insufficiently generous and turned it down.
The loans come due in 2023 and 2024.
https://www.nytimes.com/2020/10/27/business/trump-chicago-taxes.html
How Trump Maneuvered His Way Out of Trouble in Chicago
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=159152386
On reading this from google it didn't look familiar to me but searched the title anyway, and surprise. Thanks to Doc for exposing the title.
It's all so damn complex with fingers and lines going everywhere. Surely they would eat spaghetti at least a few times while working on this stuff, as it must be hard for them to find where these super-wealthy crooks, mistakenly or not, cross the line. That's where the fork must go.
To the end of the article.
Turning Unpaid Debt Into Canceled Debt
Why didn’t the lenders seize the building?
Going to court to take over the unfinished skyscraper promised to be a costly, yearslong process, especially given Mr. Trump’s reputation for using the legal system to drag out fights and grind down opponents. It seemed simpler to resolve the dispute.
On July 28, 2010, lawyers for Mr. Trump, Deutsche Bank and Fortress notified the court that they had reached a private settlement. The terms weren’t disclosed.
But Mr. Trump’s federal tax returns, as well as loan documents filed in Cook County, Ill., provide clues to what happened: Mr. Trump was let off the hook for about $270 million. It was the type of generous financial break that few American companies or individuals could ever expect to receive, especially without filing for bankruptcy protection.
Before Mr. Trump defaulted, Fortress had expected to receive more than $300 million from his company: the $130 million in principal and roughly $185 million in anticipated interest and fees.
But Fortress and its partners — including Mr. Mnuchin’s Dune Capital, as well as Cerberus Capital Management, whose co-chief executive, Stephen A. Feinberg, would become a major Trump fund-raiser and go on to lead a White House advisory panel — quickly realized they wouldn’t ever collect that full amount.
Ultimately, Fortress settled for $48 million, which Mr. Trump wired to the firm in March 2012, according to people familiar with the deal.
The forgiven debts showed up in Mr. Trump’s tax returns. For 2010, Mr. Trump’s 401 Mezz Venture reported about $181 million in canceled debts. Two years later, DJT Holdings, an umbrella company that the Chicago project had been folded into, reported that another $105 million of debt had been forgiven. Most of that appears to reflect the unpaid Fortress sum.
In many ways, it repeated a pattern that had played out more than a decade earlier at Mr. Trump’s Atlantic City casinos: a cycle of defaulting on debts and then persuading already-burned lenders to cut him a break.
The Last $99 Million
Mr. Trump’s companies got a pass on the money they owed on the Deutsche Bank loan, too.
The 2010 settlement gave Mr. Trump a couple of years to sell hotel units, condos and parking spaces to repay that loan, according to Steven R. Schlesinger, a lawyer who represented the Trump Organization in the Chicago litigation.
By 2012, the Trump Organization had drummed up about $235 million to repay the financial institutions to whom Deutsche Bank had sold pieces of the original loan. They included banks and asset managers in the United States, Germany, Ireland and China, according to court records.
But Mr. Trump still owed $99 million, according to people familiar with the debt. Where would he come up with that money?
Though Deutsche Bank had vowed to do no more business with Mr. Trump, his son-in-law, Jared Kushner, introduced him to his personal wealth manager at the bank, Rosemary Vrablic. Ms. Vrablic, with the support of her superiors, soon agreed to restart the relationship with Mr. Trump.
Rosemary Vrablic, Jared Kushner’s personal wealth manager at Deutsche Bank, helped restart the lender’s relationship with
Mr. Trump. Michael Nagle
In 2012, Ms. Vrablic’s division made two loans secured by the Chicago skyscraper: one for nearly $54 million, another for $45 million, according to loan documents filed with the Cook County Recorder of Deeds. Mr. Trump agreed to personally guarantee the new loans, according to several people familiar with the deal.
The funds were used to immediately repay the $99 million that Mr. Trump still owed on the original Chicago loan, the people said. In other words, one wing of Deutsche Bank was providing Mr. Trump the money to repay another division of the same bank.
The following spring, the Trump Organization repaid $54 million, according to a person briefed on the matter and Cook County records. That left $45 million outstanding. But in 2014, Deutsche Bank agreed to lend another $24 million on the property and to extend the due date until 2024, records show. Mr. Trump now owed the bank $69 million. By May 2016, he had repaid the $24 million.
At that time, the Chicago loans were only one element of the relationship between Deutsche Bank and Mr. Trump. Ms. Vrablic’s team also lent Mr. Trump’s company $125 million for work on his Doral golf resort in Florida and up to $170 million to transform the Old Post Office building in Washington into a luxury hotel. Mr. Trump personally guaranteed those loans, too.
The guarantees were advantageous for him. Because they counted as investments in his business for tax purposes, the guarantees increased the amount of losses he could use to avoid income taxes in the future. Mr. Trump’s federal tax returns show that he has personally guaranteed the repayment of $421 million in debts.
Most of that is on loans from Deutsche Bank. At the end of 2018, Mr. Trump and his companies owed the bank $330 million.
Whittling Down Tax Bills
The I.R.S. requires taxpayers to treat forgiven debts as income when calculating what they owe in federal taxes. The New York attorney general, Letitia James, is investigating whether Mr. Trump followed the law.
The tax records reviewed by The Times show that while Mr. Trump accounted for $287 million of income from his canceled debts, he managed to avoid paying income taxes on nearly all of it.
Mr. Trump reported $40 million of forgiven debt as income in 2010. But losses from his businesses — including $30.8 million in red ink on the Chicago project — meant he had no taxable income that year.
Despite drawing new business from its connection to the president, the property would continue to fall short, with retail space sitting empty
and profits plummeting. Alyssa Schukar for The New York Times
Mr. Trump avoided immediate income taxes on another $104.8 million of the forgiven loans in a way that could increase his taxes later. He would generally have been entitled to write off the total amount he spent on a building over a number of years, a process known as depreciation. Instead, he agreed to reduce those eventual write-offs by $104.8 million, an alternative allowed in tax law.
For the other $141 million, Mr. Trump took advantage of a law, passed after the 2008 financial crisis, that allowed income from canceled debts to be deferred for five years and then spread out over the next five. Each year from 2014 through 2018, Mr. Trump declared $28.2 million of canceled-debt income.
As it turned out, though, losses in other parts of his business wiped out most of his federal tax bill on that income. He paid nothing for 2014; $641,931 for 2015; and, after credits, only $750 a year for 2016 and 2017. It isn’t clear how much he paid for 2018.
Loans Coming Due
Like Mr. Trump’s other properties, the Trump International Hotel & Tower in Chicago has benefited in some ways from its connection to the president.
Last year, for example, an aviation company that was lobbying the Trump administration for contracting work held an event there. Mr. Trump attended an October 2019 lunch fund-raiser at the hotel, which generated about $100,000 in revenue for his company, The Washington Post reported.
But the skyscraper’s fortunes have withered. Most of its retail space has never been occupied, The Real Deal reported last year. Its revenue declined from $67 million in 2014 to $50 million in 2018, while profits plunged from $16.3 million to $1.8 million over the same period.
The problems intensified in 2020, as the coronavirus forced restaurants, including Mr. Trump’s in Chicago, to close. The Trump family sought financial relief from Deutsche Bank among others.
The bank offered to let Mr. Trump’s companies pause interest payments on their loans. The Trump Organization decided the bank’s proposal was insufficiently generous and turned it down.
The loans come due in 2023 and 2024.
https://www.nytimes.com/2020/10/27/business/trump-chicago-taxes.html
It was Plato who said, “He, O men, is the wisest, who like Socrates, knows that his wisdom is in truth worth nothing”
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