We know that in the US the IRS tends to avoid litigation with the very rich, and they also lack the resources to check on everything submitted on tax returns. One of the hardest things to check on is real estate valuations, because (to my knowledge) how you arrived at a valuation is not something that is included in a tax return. So the onus is on the IRS to
a) have reason to suspect that taxpayer is lying
b) do their own valuations, which might include gaining access to paperwork and the property
c) argue in court that the IRS has the more correct valuation
Valuations can have a subjective aspect, especially for the more unique properties, rather than an apartment with clear recent records of selling prices in similar apartments.
Recent reporting has debunked the idea (that nobody believed) that Donald Trump was self-made and merely got a $1 million loan from his father. It also discovered a massive tax fraud relating to underpaid gift taxes regarding property gifted by Fred Trump to his children. Massive in the audacity and the under-reporting of the true value of the gifts.
The president’s parents, Fred and Mary Trump, transferred well over $1 billion in wealth to their children, which could have produced a tax bill of at least $550 million under the 55 percent tax rate then imposed on gifts and inheritances.
The Trumps paid a total of $52.2 million, or about 5 percent, tax records show.
Leave a Comment