Thursday, November 03, 2016

It seems that Donald Trump is not as rich 

as he would have us believe

On the financial disclosure forms that Donald J. Trump has pointed to as proof of his tremendous success, no venture looks more gold-plated than his golf resort in Doral, Florida, where he reported revenues of $50 million in 2014. 
That figure accounted for the biggest share of what he described as his income for the year.
But this summer, a considerably different picture emerged in an austere government hearing room in Miami, where Mr. Trump’s company was challenging the resort’s property tax bill.
Mr. Trump’s lawyer handed the magistrate an income and expense statement showing that the gross revenue had indeed been $50 million.

 But after paying operating costs, the resort had actually lost $2.4 million.
Mr. Trump has repeatedly held out his financial disclosures as a justification for breaking with tradition and refusing to release his personal tax returns. “You don’t learn that much from tax returns,” he said in September during his first debate with Hillary Clinton. “You learn a lot from financial disclosure. And you should go down and take a look at that.”
But an examination of his tax appeals on several properties, and other documents obtained by The New York Times through Freedom of Information requests, shows that what Mr. Trump has reported on those forms is nowhere near a complete picture of his financial state.
The records demonstrate that large portions of those numbers represent cash coming into his businesses before covering costs like mortgage payments, payroll and maintenance. 

After expenses, some of his businesses make a small fraction of what he reported on his disclosure forms, or actually lose money.
In fact, it is virtually impossible to determine from the forms just how much he is earning in any year.
Mr. Trump appears to have used a provision in federal ethics laws that allows business owners to list gross revenue, as opposed to net income after expenses, on their disclosure forms. But he does not seem to have completely acknowledged that choice. Rather, he has suggested that the figures on the form represent money in his pocket.
In news releases, the Trump campaign said that “Mr. Trump’s income” listed in a disclosure form filed last year was $362 million, and was more than $557 million in a form filed this year. During the debate with Mrs. Clinton in September, he mentioned an even larger figure.
“It shows income … in fact, the income — I just looked today — the income is filed at $694 million for this past year, $694 million,” Mr. Trump said. “If you would have told me I was going to make that 15 or 20 years ago, I would have been very surprised.”
A spokeswoman for Mr. Trump, Hope Hicks, declined to answer questions about how Mr. Trump had reported his income, saying only that his disclosure form “speaks for itself.”
Another seeming cash cow, at least as far as the forms portray it, is 40 Wall Street, an Art Deco office building in Lower Manhattan that Mr. Trump has spoken of as perhaps the greatest bargain he ever struck.
“I make approximately $20 million a year in rentals from 40 Wall Street and the building is now worth $500 million,” Mr. Trump wrote in “Trump Never Give Up,” published in 2008. “So, aside from owning the most beautiful building in Lower Manhattan, I have the added attraction of making a profit.”
On his financial disclosure forms, Mr. Trump listed the income he derived from rents in the building in the highest category on the form — more than $5 million. (The form requires listing monetary ranges for most types of income, and precise dollar figures where the gross revenue of a business is provided.)
But the income and expense statement that he filed with the New York City Tax Commission to appeal his property taxes shows that after mortgage payments and other costs, the building produced a cash flow of about $104,000 in 2014.

 Over the previous three years, it had generated a negative cash flow of $5.5 million, as the fallout of the 2008 financial crisis took a toll on downtown office buildings.
Last year, the building rebounded and turned a significant profit: Occupancy rose to 95 percent, according to securities filings. The building’s cash flow after expenses was just under $3 million, still well below the more than $5 million that Mr. Trump reported on his disclosure forms. The building also paid the Trump Organization $966,000 last year in management fees.
Joel Rosenfeld, a real estate accountant and New York University professor who reviewed some of the filings at The Times’s request, said Mr. Trump’s narrow margins at 40 Wall Street before last year raised questions about the building’s long-term prospects. “He may have turned the corner,” Mr. Rosenfeld said.
The recent negative cash flow at two of Mr. Trump’s premier properties raises possible motivations he may have for not releasing his tax returns: They could show that his success is not as he has claimed, or that he pays little or nothing in federal taxes. That could be a continuation of a long trend. 

An article last month in The Times revealed that Mr. Trump’s 1995 tax records showed a $916 million loss that could have allowed Mr. Trump to legally avoid paying federal income taxes for up to 18 years.
While the property tax appeals are a useful reality check on individual properties, they provide an imperfect window to Mr. Trump’s overall income and wealth.
The income and expense statements in such appeals are not available on every Trump property for every year. Also, the performance of a few properties cannot reflect the entirety of Mr. Trump’s endeavours, which have included the successful “Apprentice” reality television series as well as naming rights and management fees he earns from buildings in New York and elsewhere. And the nine-figure numbers Mr. Trump presents as his income do not include streams like royalties, investments and capital gains.
But the appeals do show a level of detail absent in other documents that have become public.



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