How a $300 tax deduction proves Donald Trump makes less than half a million dollars

[sinkspur]

http://www.crainsnewyork.com/article/20160308/BLOGS02/160309865/how-did-trump-qualify-for-a-middle-class-tax-break

How a $300 tax deduction proves Donald Trump makes less than half a million dollars

The GOP front runner received a tax break available only to couples deemed by the state to have made $500,000 or less

Aaron Elstein By Aaron Elstein 

March 8, 2016


Donald Trump qualifies for a New York state property-tax break.

One of the enduring mysteries of Donald Trump is just how much wealth he has. Forbes pegs his net worth at $4.5 billion, while Bloomberg News puts it at $2.9 billion. The GOP front-runner himself has said he's "really rich."

Maybe, but Trump's income is low enough to qualify for a New York state property-tax break that most high-rollers don't get.

It's called the STAR program, which stands for the New York State School Tax Relief Program and has been around since 1997. It offers an approximately $300 annual benefit for those who qualify. Hundreds of thousands of New York homeowners get it.

Here's where it gets interesting for Trump: To be eligible for STAR, a married couple must have annual income of $500,000 or less. One wouldn't think a guy as rich as Trump claims to be would qualify, but records filed with the city's Department of Finance show he received a $302 STAR benefit on his latest property-tax bill for his Trump Tower penthouse on Fifth Avenue.

That means whatever his annual income is, it's less than $500,000. (The state defines income for STAR purposes as federal adjusted gross income minus the taxable amount of total distributions from annuities or individual retirement accounts.) And Trump would have to have declared his New York apartment as his primary residence and sent the state a copy of his federal income-tax return in order to qualify for the $302 tax break.

"It's strange that a billionaire would apply for a $302 tax benefit and, moreover, that he would take it," said Martha Stark, a property-tax expert and former New York City finance commissioner who is now a lecturer at Baruch College. A Trump spokeswoman had no immediate comment. By the way, the city finance department checks with New York state tax authorities every year to make sure applicants for the STAR benefit have income under $500,000.

Of course, it's possible to be quite rich even with a low annual income. Much of Trump's wealth is in the value of the properties he owns or which bear his name thanks to licensing agreements. Still, that sort of wealth is quite different from having a lot of cash. Trump issued a financial statement last June that proclaimed his net worth to be $8.7 billion, but the statement wasn't signed by an accounting firm, so it shouldn't be taken seriously. A month after the $8.7 billion claim, he issued a press release upping the figure to "in excess of TEN BILLION DOLLARS."

"My net worth fluctuates, and it goes up and down with markets and with attitudes and with feelings, even my own feeling," Trump said in a December 2007 court deposition. In a filing last year with the Federal Election Commission, Trump disclosed $362 million in "income" for 2014, although Fortune reporter Shawn Tully recently observed that lofty figure is actually revenue and not income, which is what's left over after paying staff salaries, private-jet costs and other expenses.

Whatever the reality may be, according to city finance records, Trump's annual property-tax bill is $175,544. That suggests a big slug of his income is going to pay taxes, which might explain why he wants to cut them so aggressively for high earners.

Trump's property-tax bill was lowered by $37,236 under a city abatement program for which many co-op and condo owners qualify.

The city estimates his home's market value at only $5.2 million, vastly lower than its real-world value. (A unit below his went on the market for $23 million last month.) That's the case because the city isn't permitted to use actual market values when assessing taxes, Stark said, but rather must pretend that Trump Tower is a rental property and judge how much the entire building would fetch in rent.

By the way, according to a 2007 study by the Manhattan Institute, 75,000 New Yorkers earn more than $500,000 per year. In other words, 75,000 of Trump's neighbors earn more than he does. Which, if you think about it, is kind of rich.

[R4 TrumPence]

It is incredible how naive the writer pretends to be.
$302.00 is for NYC school relief tax. He has a child in school.

The condo $30k is more than likely a citywide condo owner abatement.

I could be wrong, but when we lived in the hi rise condo in Jersey, we got a condo tax abatement. It had nothing to do with income.

[Carling]

It is incredible how naive the writer pretends to be.
$302.00 is for NYC school relief tax. He has a child in school.

The condo $30k is more than likely a citywide condo owner abatement.

I could be wrong, but when we lived in the hi rise condo in Jersey, we got a condo tax abatement. It had nothing to do with income.

So what you're saying is that sinkspur posted yet another article that is full of sh!t.  Shocking.   

[truth_seeker]

If his tax returns are not public, pending audit, what do they know and how do they know


EDITED WE CAN'T PUT PERSONAL INFO ON FORUM, UNLESS APPROVED BY THAT POSTER

Sorry TS dats da rools.

[A-Lert]

So what you're saying is that sinkspur posted yet another article that is full of sh!t.  Shocking.   

It's really pathetic. Why doesn't he? ever  post about policy and issues. The constant smears and innuendos are disgusting.

[sinkspur]

It's really pathetic. Why doesn't he? ever  post about policy and issues. The constant smears and innuendos are disgusting.

To be eligible for STAR, a married couple must have annual income of $500,000 or less.

Take it up with author of the article.

[ABX]

When you get to that level income, things get very 'gray'. It is true, he may only have paid himself through his org $500K/year but that doesn't relate to his value or how much he took in. Considering that he, himself is the brand, much of his expenses could be under his company's umbrella. Much of his earnings may also be derived from interest on investments instead of income.

Then you get to his net worth which may also be very gray. I'm sure a vast majority of his worth is valuation of his property and personal brand, not in liquid assets. You'll probably never find agreement on someone of his stature's true net worth because to the IRS, he'll probably try to make it look as small as possible for tax purposes but for things like Forbes ratings or bragging rights, he'll make it look as large as possible. That can easily be done through valuation of non-hard assets such as how much he values his personal branding (his business is branding after all). One of his early real-estate investor advise was to over-estimate your current income (in order to qualify for more credit) by valuing your potential earnings (not on paper).

This brings us to something about why it is important to release his IRS tax records. It will show how much of his value is in liquid assets- ie, what kind of checks he can write. He has loaned (not donated) about $12 million to his campaign, but if his tax records show he doesn't usually have near that in liquid assets, it will beg the question if he is just skirting IRS donation reporting requirements by having people invest directly in him versus donate to his campaign- those investments then given to the campaign as loans. Those loans have to be paid back so what is the promise of return for those who personally invested in him?

[R4 TrumPence]

To be eligible for STAR, a married couple must have annual income of $500,000 or less.

Take it up with author of the article.

 

[R4 TrumPence]

Oh and if you are a resident of SC your property tax is sooo low!
Ours was $2800 for our condo, but you fill out the residency forms and now it is $329.00. It has nothing to do with income.