(Bloomberg) -- A New York Times story based on Donald Trump’s long-sought-after tax data shows he avoided paying income taxes for most of the past two decades and paid only $750 the year he was elected president.That doesn’t mean he isn’t a billionaire.By pairing moneymaking businesses with spectacular money-losers, the Trump Organization has been able to shield profits generated by office properties and “The Apprentice” from tax collectors. It’s a souped-up version of the formula deployed by America’s landlord class for decades. But tax losses are different from operating losses, and the new data don’t necessarily show his business empire is heading into crisis, even if it’s carrying sizable debts.“Your tax return at the end of the day shows income and whatever deductions are claimed against that income. That’s it,” said Thorne Perkin, president at Papamarkou Wellner Asset Management. “It doesn’t necessarily show net worth.”The newspaper’s report described the extent of Trump’s tax-cutting strategies, such as taking deductions for consulting fees to his daughter and for hairstyling, which resulted in paying far less than poorer Americans. Although the report raises questions about the legality of some of the maneuvers, the new details don’t affect the Bloomberg Billionaires Index estimate of his wealth. His net worth is based chiefly on the value of his office and commercial property holdings, minus debts that were already known. The index estimated his net worth at $2.7 billion as of August, down $300 million from mid-2019, hurt by declining prices for certain types of real estate holdings.Trump’s office properties include commercial spaces at Trump Tower, a leasehold on 40 Wall Street in downtown Manhattan and a 30% interest in two office towers co-owned with Vornado Realty Trust. Collectively, the assets are valued at about $1.9 billion, and Trump’s share of the debt that encumbers them is about $670 million -- meaning they constitute almost half of his net worth.Financial records for his golf courses in Europe have long shown that, after including items such as depreciation, they run in the red. The tax data obtained by the Times reveal Trump’s American golf courses operate similarly.Depreciation is crucial for real estate investors. Depending on the type of property at hand, they can write off a portion of its value over a useful lifetime pre-determined by the Internal Revenue Service. That allows investors to claim tax losses on the property even when they’re putting money in their pockets.“You want to show as much losses as you possibly can for your deductions,” said Papamarkou’s Perkin. “That’s a big part of the advantages of real estate investing.”The president’s son, Donald Trump Jr., disputed the Times’s reporting on Tuesday while acknowledging that Trump exploited depreciation, tax credits and other provisions of the tax code.“He’s paying tens of millions in taxes -- now, he’s not going to pay more” than he needs to, the president’s son said in an interview on Fox Business Network. “And by the way, he’s following the tax code that people like Joe Biden, who has been in DC for 47 years, have written. He’s playing by their rules. Joe Biden is taking advantage of the same loopholes.”The Times in a Monday story also revealed that when Trump did pay taxes it was because of cash from his role fronting “The Apprentice” and not as a real-estate developer. He earned $197 million from the show and $230 million from branding, speaking engagements and licensing deals off the back of the fame the series provided. As well as borrowing against Trump Tower and selling stocks and bonds, he plowed some of that money into the money-losing golf courses.Carrying LoansThe tax documents described by the Times aren’t enough to draw conclusions about the profitability of Trump’s empire. But even if his golf courses are bleeding money, they contribute comparatively little to the tally of his fortune -- about $430 million before debt. Prices for golf resorts are down after years of decreasing interest in the sport. Younger generations simply aren’t taking it up as quickly as their elders are leaving it behind.Trump has long been required to disclose a road map to his assets and liabilities. In 2015, then a contender for the Republican party’s nomination for president, he released a financial disclosure listing the lenders behind his loans, ranges for their outstanding balances, when they were issued and when they must be repaid.That several are due in the next few years isn’t unusual in commercial real estate, where most loans run five to 10 years and are refinanced regularly. Unless there is a serious deterioration in the performance of his properties, it’s likely his portfolio can be refinanced before loans mature.Though Trump has carried on this balancing act for years, his re-election could make obtaining new loans harder if potential lenders don’t want to face the prospect of foreclosing on a sitting U.S. president. Conversely, Trump is engaged in a variety of court fights that could accelerate once he leaves office and complicate refinancing. The Covid-19 pandemic also may take a lasting toll on the value of his holdings, making future loans more onerous.His biggest financial vulnerabilities remain his hotel in Washington, where the pandemic has slowed business, and Doral, a sprawling golf resort in Florida. He has taken out nearly $300 million of personally-guaranteed loans from Deutsche Bank AG against these properties. The debts mature in 2023 and 2024, according to his personal financial disclosure.Room to BorrowBut Trump, whose earlier career included a series of bankruptcies, also has a safety valve: the office properties.When he refinanced Trump Tower in 2012 with a $100 million loan, it was appraised at $480 million. A 2015 refinancing of 40 Wall Street fetched a $160 million loan on a $540 million appraisal.That left both properties relatively low-levered for Manhattan real estate, suggesting either a newly learned financial conservatism on Trump’s part or a squeamishness on the part of the lender, Ladder Capital. Ladder, which specializes in loans for commercial property, is Trump’s second-biggest lender after Deutsche Bank.An August appraisal of the buildings by the Bloomberg Billionaires Index, based on current net income and prevailing capitalization rates, was less sanguine, valuing them at $365 million and $375 million respectively. But so long as the pandemic doesn’t crater office values, the properties could carry far more debt, were Trump to need it.(Updates with comments from Trump’s son in 10th paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
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Breonna Taylor: Officer who may have fired fatal shot looking to retire after receiving 'countless threats'
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‘Fox & Friends’ Hosts Look On in Horror as Rudy Giuliani Blurts Out Biden Dementia Conspiracy Theory
Everyone knows that live television isn’t easy. Anything can go wrong—from a faulty connection, a verbal slip-up, or, as was the case on Tuesday morning’s Fox & Friends, Rudy Giuliani bellowing insane conspiracy theories at the nation with no obvious way to stop him.It’s always a risk to allow Giuliani to share his wildly unpredictable stream of consciousness live. The man who was named Time magazine’s Person of the Year for 2001 has long been reduced to sharing the latest Trumpist conspiracy theories on any cable news channel that has the budget to cover any possible subsequent defamation lawsuits.This time, his F&F hosts looked on with visible horror in their eyes as Giuliani shared his completely baseless belief that Joe Biden is suffering from dementia. If you have the time, it’s worth watching the clip at least three times so you can see each of the hosts panicking in their own unique way as the former New York City mayor rambles on and on.> On Fox & Friends, Rudy Giuliani says Joe Biden "has dementia. There's no doubt about it. I've talked to doctors. ... The president's quite right to say maybe he's taken adderall." The hosts get visibly uncomfortable. pic.twitter.com/2Ma7DKNBpS> > — Bobby Lewis (@revrrlewis) September 29, 2020With a mischievous cackle, Giuliani began: “The man [Biden] has dementia. There’s no doubt about it. I’ve talked to doctors. I’ve had them look at a hundred different tapes of his five years ago and today.” Trying his very best to shut Giuliani down, host Steve Doocy interjected that Biden’s team have said the Democrat has no serious medical problems.Giuliani then made an extraordinary noise at Doocy that can best be typed as “Oowughawughawugh,” before continuing: “He can’t recite the Pledge of Allegiance and he’s fine? He was in the Senate for 160 years? I mean, he can’t do the prologue to the... to the... con... to the... uh... Constitution of the United States or the Declaration of Independence, any of them.”Getting louder and increasingly excited about his armchair diagnosis, Giuliani went on: “He can’t do NUMBERS. Wow, are the numbers screwed up. He actually displays symptoms that two gerontologists told me are classic symptoms of middle level dementia.” Doocy and co-host Ainsley Earhardt both responded to that claim by softly saying: “Right.” The third host, Brian Kilmeade, can just be seen blinking rapidly.Fox News Lobotomizes Its ‘Brain Room,’ Cuts Fact-Based JournalismNevertheless, Giuliani persisted. “That’s when [Biden] does that ‘I pledge allegiance to the United States... uh... uh... um... I think,’ he’s done that twice,” said the ex mayor. “That’s a classic symptom in the DSM-V, it’s the fifth symptom, of dementia, he’s got eight of the 10.”Then, seemingly remembering that he was on the show to talk about tonight’s presidential debate, he went on: “Look, that isn’t the debate. He can get through it. I think the president is quite right to say maybe he’s taken Adderall or some kind of attention deficit disorder thing.”As Giuliani began pulling prescription medicine brands out of the air, Doocy had finally had enough and told him firmly: “None of us are doctors, that is your opinion.” Giuliani fought back, saying it was actually the opinion of some very professional-sounding doctors that he knows.But the game was up. Kilmeade, in his first verbal interjection of the entire exchange, said with exasperation: “We can stay away from that.” Earhardt then moved on to pick Giuliani’s brain on the Supreme Court.This particular line of attack is one that Giuliani—whose work as President Trump’s lawyer and top dirt-digger on Hunter and Joe Biden kicked off a chain of events that got his client impeached last year—has enthusiastically embraced as one of his primary functions now for Team Trump.Shortly before midnight on Monday night, Giuliani started texting The Daily Beast to say that Trump did “great” in recent White House debate prep (for which the president said on Sunday that Giuliani and former New Jersey governor Chris Christie took part), and to rail against Biden as a “senile,” “broken down old crook” who’s supposedly suffering from “dementia” and needs “ADD drugs” to get through the Tuesday debate. The Trump attorney also claimed that someone had told him how stupid Biden was in law school.Giuliani also mentioned late Monday evening that he’d be flying with Trump on Air Force One on Tuesday and would be at the Cleveland debate. Asked about what kinds of questions he peppered the president with during the prep, the former New York City mayor replied, “It really doesn’t work like that with him. It’s much more of a discussion rather than a rehearsal. Plus you are dealing with a very smart, very alert human being not a senile old man.”Read more at The Daily Beast.Get our top stories in your inbox every day. Sign up now!Daily Beast Membership: Beast Inside goes deeper on the stories that matter to you. Learn more.
The president has shrugged off the pandemic as a "blue state" problem. Now it's hitting Trump-supporting states hard.