DONALD TRUMP (POTUS), THE APPRAISAL INSTITUTE (AI, MAI) + LAND TRUST ALLIANCE (LTA) = THE RACKETEER INFLUENCED AND CORRUPT ORGANIZATIONS ACT, (RICO)
In Mr. Trump’s nearly four years in office — and across his endlessly hyped decades in the public eye — journalists, prosecutors, opposition politicians and conspiracists have, with limited success, sought to excavate the enigmas of his finances. By their very nature, the filings will leave many questions unanswered, many questioners unfulfilled. They comprise information that Mr. Trump has disclosed to the I.R.S., not the findings of an independent financial examination. They report that Mr. Trump owns hundreds of millions of dollars in valuable assets, but they do not reveal his true wealth. Nor do they reveal any previously unreported connections to Russia.
With the term “personal taxes,” however, Mr. Garten appears to be conflating income taxes with other federal taxes Mr. Trump has paid — Social Security, Medicare and taxes for his household employees. Mr. Garten also asserted that some of what the president owed was “paid with tax credits,” a misleading characterization of credits, which reduce a business owner’s income-tax bill as a reward for various activities, like historic preservation.
Mr. Trump has often posited that his losses are more accounting magic than actual money out the door.
Last year, after The Times published details of his tax returns from the 1980s and 1990s, he attributed the red ink to depreciation, which he said in a tweet would show “losses in almost all cases” and that “much was non monetary.”
“I love depreciation,” Mr. Trump said during a presidential debate in 2016.
Depreciation, though, is not a magic wand — it involves real money spent or borrowed to buy buildings or other assets that are expected to last years. Those costs must be spread out as expenses and deducted over the useful life of the asset. Even so, the rules do hold particular advantages for real estate developers like Mr. Trump, who are allowed to use their real estate losses to reduce their taxable income from other activities.
Mr. Trump had big plans when he bought the property in 1996 — a golf course, a clubhouse and 15 private homes. But residents of surrounding towns thwarted his ambitions, arguing that development would draw too much traffic and risk polluting the drinking water.
Mr. Trump instead found a way to reap tax benefits from the estate. He took advantage of what is known as a conservation easement. In 2015, he signed a deal with a land conservancy, agreeing not to develop most of the property. In exchange, he claimed a $21.1 million charitable tax deduction.
The tax records reveal another way Seven Springs has generated substantial tax savings. In 2014, Mr. Trump classified the estate as an investment property, as distinct from a personal residence. Since then, he has written off $2.2 million in property taxes as a business expense — even as his 2017 tax law allowed individuals to write off only $10,000 in property taxes a year
Mr. Garten, the Trump Organization lawyer, did not respond to a question about the Seven Springs write-off.
The Seven Springs conservation-easement deduction is one of four that Mr. Trump has claimed over the years. While his use of these deductions is widely known, his tax records show that they represent the lion’s share of his charitable giving — about $119.3 million of roughly $130 million in personal and corporate charitable contributions reported to the I.R.S.
Two of those deductions — at Seven Springs and at the Trump National Golf Club in Los Angeles — are the focus of an investigation by the New York attorney general, who is examining whether the appraisals on the land, and therefore the tax deductions, were inflated.
Another common deductible expense for all businesses is legal fees. The I.R.S. requires that these fees be “directly related to operating your business,” and businesses cannot deduct “legal fees paid to defend charges that arise from participation in a political campaign.”
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