Newly obtained tax information reveals that from 1985 to 1994, Donald J. Trump’s businesses were in far bleaker condition than was previously known.
By the time his master-of-the-universe memoir “Trump: The Art of the Deal” hit bookstores in 1987, Donald J. Trump was already in deep financial distress, losing tens of millions of dollars on troubled business deals, according to previously unrevealed figures from his federal income tax returns.
Mr. Trump was propelled to the presidency, in part, by a self-spun narrative of business success and of setbacks triumphantly overcome. He has attributed his first run of reversals and bankruptcies to the recession that took hold in 1990. But 10 years of tax information obtained by The New York Times paints a different, and far bleaker, picture of his deal-making abilities and financial condition.
The data — printouts from Mr. Trump’s official Internal Revenue Service tax transcripts, with the figures from his federal tax form, the 1040, for the years 1985 to 1994 — represents the fullest and most detailed look to date at the president’s taxes, information he has kept from public view. Though the information does not cover the tax years at the center of an escalating battle between the Trump administration and Congress, it traces the most tumultuous chapter in a long business career — an era of fevered acquisition and spectacular collapse.
The numbers show that in 1985, Mr. Trump reported losses of $46.1 million from his core businesses — largely casinos, hotels and retail space in apartment buildings. They continued to lose money every year, totaling $1.17 billion in losses for the decade.
In fact, year after year, Mr. Trump appears to have lost more money than nearly any other individual American taxpayer, The Times found when it compared his results with detailed information the I.R.S. compiles on an annual sampling of high-income earners. His core business losses in 1990 and 1991 — more than $250 million each year — were more than double those of the nearest taxpayers in the I.R.S. information for those years.
Over all, Mr. Trump lost so much money that he was able to avoid paying income taxes for eight of the 10 years. It is not known whether the I.R.S. later required changes after audits.
Since the 2016 presidential campaign, journalists at The Times and elsewhere have been trying to piece together Mr. Trump’s complex and concealed finances. While The Times did not obtain the president’s actual tax returns, it received the information contained in the returns from someone who had legal access to it. The Times was then able to find matching results in the I.R.S. information on top earners — a publicly available database that each year comprises a one-third sampling of those taxpayers, with identifying details removed. It also confirmed significant findings using other public documents, along with confidential Trump family tax and financial records from the newspaper’s 2018 investigation into the origin of the president’s wealth.
The White House’s response to the new findings has shifted over time.
Several weeks ago, a senior official issued a statement saying: “The president got massive depreciation and tax shelter because of large-scale construction and subsidized developments. That is why the president has always scoffed at the tax system and said you need to change the tax laws. You can make a large income and not have to pay large amount of taxes.”
On Saturday, after further inquiries from The Times, a lawyer for the president, Charles J. Harder, wrote that the tax information was “demonstrably false,” and that the paper’s statements “about the president’s tax returns and business from 30 years ago are highly inaccurate.” He cited no specific errors, but on Tuesday added that “I.R.S. transcripts, particularly before the days of electronic filing, are notoriously inaccurate” and “would not be able to provide a reasonable picture of any taxpayer’s return.”
Mark J. Mazur, a former director of research, analysis and statistics at the I.R.S., said that, far from being considered unreliable, data used to create such transcripts had undergone quality control for decades and had been used to analyze economic trends and set national policy. In addition, I.R.S. auditors often refer to the transcripts as “handy” summaries of tax returns, said Mr. Mazur, now director of the nonpartisan Urban-Brookings Tax Policy Center in Washington.
In fact, the source of The Times’s newly obtained information was able to provide several years of unpublished tax figures from the president’s father, the builder Fred C. Trump. They matched up precisely with Fred Trump’s actual returns, which had been obtained by The Times in the earlier investigation.
Mr. Trump built a business licensing his name, became a television celebrity and ran for the White House by branding himself a self-made billionaire. “There is no one my age who has accomplished more,” he told Newsweek in 1987, adding that the ultimate scoreboard was “the unfortunate, obvious one: money.” Yet over the years, the actual extent of his wealth has been the subject of much doubt and debate. He broke with four decades of precedent in refusing to release any of his tax returns as a presidential candidate, and until now only a few pages of his returns have become public. Last year’s Times investigation found that he had received at least $413 million in 2018 dollars from his father.
The new tax information does not answer questions raised by House Democrats in their pursuit of the last six years of Mr. Trump’s tax returns — about his recent business dealings and possible foreign sources of financing and influence. Nor does it offer a fundamentally new narrative of his picaresque career.
But in the granular detail of tax results, it gives a precise accounting of the president’s financial failures and of the constantly shifting focus that would characterize his decades in business. In contrast to his father’s stable and profitable empire of rental apartments in Brooklyn and Queens, Mr. Trump’s primary sources of income changed year after year, from big stock earnings, to a single year of more than $67.1 million in salary, to a mysterious $52.9 million windfall in interest income. But always, those gains were overwhelmed by losses on his casinos and other projects.
The new information also suggests that Mr. Trump’s 1990 collapse might have struck several years earlier if not for his brief side career posing as a corporate raider. From 1986 through 1988, while his core businesses languished under increasingly unsupportable debt, Mr. Trump made millions of dollars in the stock market by suggesting that he was about to take over companies. But the figures show that he lost most, if not all, of those gains after investors stopped taking his takeover talk seriously.
In Washington, the struggle over access to Mr. Trump’s tax returns and other financial information has sharpened in recent days, amid partisan warfare over the findings in the Mueller report. On Monday, the Treasury secretary, Steven Mnuchin, said he would not deliver the tax returns to the Ways and Means Committee. And after vowing that “we’re fighting all the subpoenas” from House Democrats, the president has filed lawsuits against his banks and accounting firm to prevent them from turning over tax returns and other financial records.
In New York, the attorney general’s office is investigating the financing of several major Trump Organization projects; Deutsche Bank has already begun turning over documents. The state attorney general is also examining issues raised last year by The Times’s investigation, which revealed that much of the money Mr. Trump had received from his father came from his participation in dubious tax schemes, including instances of outright fraud.
The first of the two previous glimpses of the president’s tax returns came from his 1995 filings, pages of which were anonymously mailed to The Times in 2016. They showed that Mr. Trump had declared losses of $915.7 million, giving him a tax deduction so substantial that it could have allowed him to legally avoid paying federal income taxes on hundreds of millions of dollars of income for almost two decades. Several months later, the journalist David Cay Johnston was mailed pages of Mr. Trump’s 2005 returns, which showed that by then he had significant sources of income and was paying taxes.
About two weeks before the stock market crash of Oct. 19, 1987, he spent $29 million on a 282-foot yacht. Months later he bought the Plaza Hotel for $407 million. He recorded $42.2 million in core business losses for 1987, and $30.4 million for 1988.
In 1989, he bought a shuttle operation from Eastern Airlines for $365 million. It never made a profit, and Mr. Trump would soon pump in more than $7 million a month of his dwindling cash to keep it airborne, New Jersey casino regulators, who closely monitored his finances in those years, found.
Mr. Trump’s business losses that year soared to $181.7 million.
Then came the Trump Taj Mahal Hotel and Casino, which opened in April 1990 saddled with more than $800 million in debt, most at very high interest rates. It did not generate enough revenue to cover that debt, and sucked revenue from his other casinos, Trump’s Castle and Trump Plaza, pulling them deep into the red.
As a result, 1990 and 1991 represented the worst years of the period reviewed by The Times, with combined losses of $517.6 million. And over the next three years, as Mr. Trump turned over properties to his lenders to stave off bankruptcy, his core businesses lost an additional $286.9 million.
The 10-year total: $1.17 billion in losses.
Mr. Trump was able to lose all that money without facing the usual consequences — such as a steep drop in his standard of living — in part because most of it belonged to others, to the banks and bond investors who had supplied the cash to fuel his acquisitions. And as The Times’s earlier investigation showed, Mr. Trump secretly leaned on his father’s wealth to continue living like a winner and to stage a comeback.
This is not to say that Mr. Trump never made money on a deal. One that turned out quite well came in 1985, when he bought the Hotel St. Moritz in Manhattan for $73.7 million. Mr. Trump has said he sold it for $180 million in 1989. His tax information showed long-term capital gains of $99.8 million, accounting for the vast majority of such gains in the 10 years reviewed by The Times.
But that rich payday was overwhelmed by his business losses, and Mr. Trump still paid no federal income taxes that year.
Some fraction of that ocean of red ink represented depreciation on Mr. Trump’s real estate. One of the most valuable special benefits in the tax code, depreciation lets owners of commercial real estate write down the cost of their buildings.
“I love depreciation,” Mr. Trump said during a presidential debate in 2016.
Mr. Trump defended this tax strategy on Wednesday and said in a pair of Twitter posts that this was what real estate developers did in the 1980s and 1990s.
Developers “were entitled to massive write offs and depreciation which would, if one was actively building, show losses and tax losses in almost all cases,” Mr. Trump said.
He continued, “You always wanted to show losses for tax purposes….almost all real estate developers did – and often re-negotiate with banks, it was sport.”
Mr. Trump also called The Times’s investigation “a highly inaccurate Fake News hit job!”
In “The Art of the Deal,” Mr. Trump points to one of his Atlantic City casinos to illustrate the magic of depreciation. If the casino’s cost was $400 million, he says, he would be able to depreciate it at a rate of 4 percent a year, allowing him to shelter $16 million in taxable income annually.
But while this example is intended to show the benefits of depreciation, it also demonstrates that depreciation cannot account for the hundreds of millions of dollars in losses Mr. Trump declared on his taxes.
The tax code also lets business owners like Mr. Trump use losses to avoid paying tax on future income — a lucrative deduction intended to help troubled businesses get back on their feet. Mr. Trump’s losses over the years rolled into the $915.7 million free pass from income taxes — known as net operating loss — that appeared on his 1995 returns.
The newly revealed tax information sheds light on how those net operating losses snowballed. By 1991, they had grown to nearly $418 million, accounting for fully 1 percent of all the losses that the I.R.S. reported had been declared by individual taxpayers that year. And the red ink continued to accumulate apace.
Because Mr. Trump reported a negative adjusted gross income in each of the 10 years, he was not allowed to deduct any charitable contributions. So while he has boasted of making large donations at the time, the information obtained by The Times shows no such itemized deductions. Potential deductions could have been carried over to a future year, should Mr. Trump have reported a positive income.
The same tactic continued to work through 1988. Mr. Trump made a total of $57 million by briefly presenting himself as a takeover threat to, among others, Hilton Hotels, the Gillette razor company and Federated Department Stores, casino regulators found.
In all, from 1986 through 1989, Mr. Trump declared $67.3 million in gains from stocks and other assets bought and sold within one year.
By 1989, investors were less fooled by his moves. That September, he bought a large stake in American Airlines and announced a takeover bid.
“I’m very skeptical of everything this man does,” Andrew Geller, then an airline analyst at Provident National Bank in Philadelphia, told The Associated Press.
Mr. Trump was rebuffed, and the stock price fell sharply. Though at the time his losses were reported to be modest, the new tax return figures show that in 1990, the year he sold his American Airlines stake, Mr. Trump lost $34.9 million on short-term trades, wiping out half his gains from the previous four years.
He appears to have held only one other significant chunk of stock by decade’s close: a 27 percent stake in the Alexander’s department store company.
Mr. Trump had bought those shares for $67.9 million and held on, hoping to gain control of the company’s real estate with a partner. After climbing on the possibility of a takeover, the stock price slid.
Mr. Trump ultimately agreed to turn over that stock and most of his other assets — including the yacht, the Trump Shuttle and his stake in the Grand Hyatt — to his lenders. On the day in 1992 when he gave up the stock, it was trading at about $9 a share — which would represent a loss of $55.5 million.
And with that, Mr. Trump’s days as a market mover were over.
Hard data on most of Mr. Trump’s business life is hard to come by, but public findings from New Jersey casino regulators show no evidence that he owned anything capable of generating close to $52.9 million annually in interest income.
Similarly, there is no such evidence in a 1990 report on Mr. Trump’s financial condition, prepared by an accounting firm he hired at his bankers’ request and based on his most current tax returns and audited financial statements.
Mr. Trump’s interest income fell almost as quickly as it rose: He reported $18.7 million in 1990, and only $3.6 million in 1992.
At his nadir, in the post-recession autumn of 1991, Mr. Trump testified before a congressional task force, calling for changes in the tax code to benefit his industry.
“The real estate business — we’re in an absolute depression,” Mr. Trump told the lawmakers, adding: “I see no sign of any kind of upturn at all. There is no incentive to invest. Everyone is doing badly, everyone.”
Everyone, perhaps, except his father, Fred Trump.
While Donald Trump reported hundreds of millions of dollars in losses for 1990 and 1991, Fred Trump’s returns showed a positive income of $53.9 million, with only one major loss: $15 million invested in his son’s latest apartment project.
The president has long sold himself as a self-made billionaire, but a Times investigation found that he received at least $413 million in today’s dollars from his father’s real estate empire, much of it through tax dodges in the 1990s.
.. 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.
.. The Times’s findings raise new questions about Mr. Trump’s refusal to release his income tax returns, breaking with decades of practice by past presidents. According to tax experts, it is unlikely that Mr. Trump would be vulnerable to criminal prosecution for helping his parents evade taxes, because the acts happened too long ago and are past the statute of limitations. There is no time limit, however, on civil fines for tax fraud.
.. Most notably, the documents include more than 200 tax returns from Fred Trump, his companies and various Trump partnerships and trusts.
.. What emerges from this body of evidence is a financial biography of the 45th president fundamentally at odds with the story Mr. Trump has sold in his books, his TV shows and his political life. In Mr. Trump’s version of how he got rich, he was the master dealmaker who broke free of his father’s “tiny” outer-borough operation and parlayed a single $1 million loan from his father (“I had to pay him back with interest!”) into a $10 billion empire
.. In Mr. Trump’s version, it was always his guts and gumption that overcame setbacks. Fred Trump was simply a cheerleader.
.. “I built what I built myself,” Mr. Trump has said, a narrative that was long amplified by often-credulous coverage from news organizations, including The Times.
.. They described how Mr. Trump piggybacked off his father’s banking connections to gain a foothold in Manhattan real estate. They poked holes in his go-to talking point about the $1 million loan, citing evidence that he actually got $14 million. They told how Fred Trump once helped his son make a bond payment on an Atlantic City casino by buying $3.5 million in casino chips.
.. The reporting makes clear that in every era of Mr. Trump’s life, his finances were deeply intertwined with, and dependent on, his father’s wealth.
.. By age 3, Mr. Trump was earning $200,000 a year in today’s dollars from his father’s empire. He was a millionaire by age 8. By the time he was 17, his father had given him part ownership of a 52-unit apartment building. Soon after Mr. Trump graduated from college, he was receiving the equivalent of $1 million a year from his father. The money increased with the years, to more than $5 million annually in his 40s and 50s.
.. In one six-year span, from 1988 through 1993, Fred Trump reported $109.7 million in total income, now equivalent to $210.7 million. It was not unusual for tens of millions in Treasury bills and certificates of deposit to flow through his personal bank accounts each month.
.. Fred Trump was relentless and creative in finding ways to channel this wealth to his children. He made Donald not just his salaried employee but also his property manager, landlord, banker and consultant. He gave him loan after loan, many never repaid. He provided money for his car, money for his employees, money to buy stocks, money for his first Manhattan offices and money to renovate those offices. He gave him three trust funds. He gave him shares in multiple partnerships. He gave him $10,000 Christmas checks. He gave him laundry revenue from his buildings.
.. Much of his giving was structured to sidestep gift and inheritance taxes using methods tax experts described to The Times as improper or possibly illegal. Although Fred Trump became wealthy with help from federal housing subsidies, he insisted that it was manifestly unfair for the government to tax his fortune as it passed to his children.
When he was in his 80s and beginning to slide into dementia, evading gift and estate taxes became a family affair, with Donald Trump playing a crucial role, interviews and newly obtained documents show.
.. There is no shortage of clever tax avoidance tricks that have been blessed by either the courts or the I.R.S. itself. The richest Americans almost never pay anything close to full freight. But tax experts briefed on The Times’s findings said the Trumps appeared to have done more than exploit legal loopholes. They said the conduct described here represented a pattern of deception and obfuscation, particularly about the value of Fred Trump’s real estate, that repeatedly prevented the I.R.S. from taxing large transfers of wealth to his children.
“The theme I see here through all of this is valuations: They play around with valuations in extreme ways,” said Lee-Ford Tritt, a University of Florida law professor and a leading expert in gift and estate tax law. “There are dramatic fluctuations depending on their purpose.”
.. The Trumps dodged hundreds of millions in gift taxes by submitting tax returns that grossly undervalued the properties, claiming they were worth just $41.4 million.
The same set of buildings would be sold off over the next decade for more than 16 times that amount.
.. All told, The Times documented 295 streams of revenue that Fred Trump created over five decades to enrich his son.
.. as Donald Trump careened from one financial disaster to the next, his father found ways to give him substantially more money, records show. Even so, in 1990, according to previously secret depositions, Mr. Trump tried to have his father’s will rewritten in a way that Fred Trump, alarmed and angered, feared could result in his empire’s being used to bail out his son’s failing businesses.
Of course, the story of how Donald Trump got rich cannot be reduced to handouts from his father. Before he became president, his singular achievement was building the brand of Donald J. Trump, Self-Made Billionaire, a brand so potent it generated hundreds of millions of dollars in revenue through TV shows, books and licensing deals.
Constructing that image required more than Fred Trump’s money. Just as important were his son’s preternatural marketing skills and always-be-closing competitive hustle. While Fred Trump helped finance the accouterments of wealth, Donald Trump, master self-promoter, spun them into a seductive narrative. Fred Trump’s money, for example, helped build Trump Tower, the talisman of privilege that established his son as a major player in New York. But Donald Trump recognized and exploited the iconic power of Trump Tower as a primary stage for both “The Apprentice” and his presidential campaign.
.. on May 4, 2004, when Mr. Trump and his siblings sold off the empire their father had spent 70 years assembling with the dream that it would never leave his family.
Donald Trump’s cut: $177.3 million, or $236.2 million in today’s dollars.
They were both fluent in the language of half-truths and lies, interviews and records show. They both delighted in transgressing without getting caught. They were both wizards at manipulating the value of their assets, making them appear worth a lot or a little depending on their needs.
.. Emblematic of their audacity was Park Briar, a 150-unit building in Queens. As it happened, 18 days before Fred Trump Jr.’s death, the Trump siblings had submitted Park Briar’s co-op conversion plan, stating under oath that the building was worth $17.1 million. Yet as Fred Trump Jr.’s executors, Donald Trump and his fatherwhen Fred Trump Jr. died.
.. This fantastical claim — that Park Briar should be taxed as if its value had fallen 83 percent in 18 days — slid past the I.R.S. with barely a protest. An auditor insisted the value should be increased by $100,000, to $3 million.
.. During the 1980s, Donald Trump became notorious for leaking word that he was taking positions in stocks, hinting of a possible takeover, and then either selling on the run-up or trying to extract lucrative concessions from the target company to make him go away. It was a form of stock manipulation with an unsavory label: “greenmailing.” The Times unearthed evidence that Mr. Trump enlisted his father as his greenmailing wingman.
On Jan. 26, 1989, Fred Trump bought 8,600 shares of Time Inc. for $934,854, his tax returns show. Seven days later, Dan Dorfman, a financial columnist known to be chatty with Donald Trump, broke the news that the younger Trump had “taken a sizable stake” in Time. Sure enough, Time’s shares jumped, allowing Fred Trump to make a $41,614 profit in two weeks.
.. Later that year, Fred Trump bought $5 million worth of American Airlines stock. Based on the share price — $81.74 — it appears he made the purchase shortly before Mr. Dorfman reported that Donald Trump was taking a stake in the company. Within weeks, the stock was over $100 a share.
.. Fred Trump could be cantankerous and cruel, according to sworn testimony by his relatives. “This is the stupidest thing I ever heard of,” he’d snap when someone disappointed him. He was different with his son Donald. He might chide him — “Finish this job before you start that job,” he’d counsel — but more often, he looked for ways to forgive and accommodate.
.. By 1987, for example, Donald Trump’s loan debt to his father had grown to at least $11 million. Yet canceling the debt would have required Donald Trump to pay millions in taxes on the amount forgiven. Father and son found another solution, one never before disclosed, that appears to constitute both an unreported multimillion-dollar gift and a potentially illegal tax write-off.
.. Most, if not all, of his investment, which totaled $15.5 million, was made by exchanging his son’s unpaid debts for Trump Palace shares, records show.
.. Under I.R.S. rules, selling shares worth $15.5 million to your son for $10,000 is tantamount to giving him a $15.49 million taxable gift. Fred Trump reported no such gift.
.. Fred Trump evaded the 55 percent tax on gifts, saving about $8 million. At the same time, he declared to the I.R.S. that Trump Palace was almost a complete loss — that he had walked away from a $15.5 million investment with just $10,000 to show for it.
Federal tax law prohibits deducting any loss from the sale of property between members of the same family, because of the potential for abuse. Yet Fred Trump appears to have done exactly that, dodging roughly $5 million more in income taxes.
.. At its heart lay a more ambitious project, executed to perfection over decades — to create that origin story, the myth of Donald J. Trump, Self-Made Billionaire.
.. Donald Trump built the foundation for the myth in the 1970s by appropriating his father’s empire as his own.
.. Through it all, Fred Trump played along. Never once did he publicly question his son’s claim about the $1 million loan.
.. Fred Trump believed that the document potentially put his life’s work at risk.
.. did many things. It protected Donald Trump’s portion of the inheritance from his creditors and from his impending divorce settlement with his first wife, Ivana Trump. It strengthened provisions in the existing will making him the sole executor of his father’s estate. But more than any of the particulars, it was the entirety of the codicil and its presentation as a fait accompli that alarmed Fred Trump
.. He confided to family members that he viewed the codicil as an attempt to go behind his back and give his son total control over his affairs. He said he feared that it could let Donald Trump denude his empire, even using it as collateral to rescue his failing businesses. (It was, in fact, the very month of the $3.5 million casino rescue.)
.. The lawyers quickly drafted a new codicil stripping Donald Trump of sole control over his father’s estate. Fred Trump signed it immediately.
.. Yet for all the financial support he had lavished on his children, for all his abhorrence of taxes, Fred Trump had stubbornly resisted his advisers’ recommendations to transfer ownership of his empire to the children to minimize estate taxes.
.. With every passing year, the actuarial odds increased that Fred Trump would die owning apartment buildings worth many hundreds of millions of dollars, all of it exposed to the 55 percent estate tax. Just as exposed was the mountain of cash he was sitting on.
.. Even after he paid himself $109.7 million from 1988 through 1993, his companies were holding $50 million in cash and investments
‘A DISGUISED GIFT’
A family company let Fred Trump funnel money to his children by effectively overcharging himself for repairs and improvements on his properties.
.. All County’s main purpose, The Times found, was to enable Fred Trump to make large cash gifts to his children and disguise them as legitimate business transactions, thus evading the 55 percent tax.
.. All County’s invoices were padded, marked up by 20 percent, or 50 percent, or even more, records show.
.. Years later, in his deposition during the dispute over Fred Trump’s estate, Robert Trump would say that All County actually saved Fred Trump money by negotiating better deals. Given Fred Trump’s long experience expertly squeezing better prices out of contractors, it was a surprising claim. It was also not true.
.. In 1991 and 1992, Fred Trump bought 78 refrigerator-stove combinations for Beach Haven from Long Island Appliance Wholesalers. The average price was $642.69. But in 1993, when he began paying All County for refrigerator-stove combinations, the price jumped by 46 percent.
.. Likewise, the price he paid for trash-compacting services at Beach Haven increased 64 percent. Janitorial supplies went up more than 100 percent. Plumbing repairs and supplies rose 122 percent.
.. While All County was all upside for Donald Trump and his siblings, it had an insidious downside for Fred Trump’s tenants.
.. One way to justify a rent increase was to make a major capital improvement. It did not take much to get approval; an invoice or canceled check would do if the expense seemed reasonable.
.. As Robert Trump acknowledged in his deposition, “The higher the markup would be, the higher the rent that might be charged.”
.. the Trumps got approval to raise rents on thousands of apartments by claiming more than $30 million in major capital improvements.
.. By 1998, records show, All County and Apartment Management were generating today’s equivalent of $2.2 million a year
.. According to Fred Trump’s 1995 gift tax return, obtained by The Times, the Trumps claimed that properties including 25 apartment complexes with 6,988 apartments — and twice the floor space of the Empire State Building —
.. The Trumps used Robert Von Ancken, a favorite of New York City’s big real estate families. Over a 45-year career, Mr. Von Ancken has appraised many of the city’s landmarks
.. buildings in the same neighborhood as Trump buildings sold for two to four times as much per square foot as Mr. Von Ancken’s appraisals
.. Of all Fred Trump’s properties, Patio Gardens was one of the least profitable, which may be why he decided to use it as a tax deduction. In 1992, he donated Patio Gardens to the National Kidney Foundation of New York/New Jersey, one of the largest charitable donations he ever made. The greater the value of Patio Gardens, the bigger his deduction. The appraisal cited in Fred Trump’s 1992 tax return valued Patio Gardens at $34 million, or $61.90 a square foot.
By contrast, Mr. Von Ancken’s GRAT appraisals found that the crown jewels of Fred Trump’s empire, Beach Haven and Shore Haven, with five times as many apartments as Patio Gardens, were together worth just $23 million, or $11.01 per square foot.
.. Mr. Von Ancken claimed that they were worth less than nothing — negative $5.9 million, to be exact.
.. a bank would value at $106.6 million in 2004.
..The I.R.S. has long accepted the idea that ownership with control is more valuable than ownership without control. Someone with a controlling interest in a building can decide if and when the building is sold, how it is marketed and what price to accept
.. the Trumps set out to create the fiction that Fred Trump was a minority owner. All it took was splitting the ownership structure of his empire. Fred and Mary Trump each ended up with 49.8 percent of the corporate entities that owned his buildings. The other 0.4 percent was split among their four children.
.. That enabled the Trumps to slash Mr. Von Ancken’s valuation in a way that was legally dubious. They claimed that Fred and Mary Trump’s status as minority owners, plus the fact that a building couldn’t be sold as easily as a share of stock, entitled them to lop 45 percent off Mr. Von Ancken’s $93.9 million valuation. This claim, combined with $18.3 million more in standard deductions, completed the alchemy of turning real estate that would soon be valued at nearly $900 million into $41.4 million.
.. The I.R.S. determined that the Trumps’ assets were worth $57.1 million, 38 percent more than the couple had claimed. From the perspective of an I.R.S. auditor, pulling in nearly $5 million in additional revenue could be considered a good day’s work. For the Trumps, getting the I.R.S. to agree that Fred Trump’s properties were worth only $57.1 million was a triumph.
.. The next year, 1998, Donald Trump’s share amounted to today’s equivalent of $9.6 million, The Times found.
This sudden influx of wealth came only weeks after he had published “The Art of the Comeback.”
.. “I learned a lot about myself during these hard times,” he wrote. “I learned about handling pressure. I was able to home in, buckle down, get back to the basics, and make things work. I worked much harder, I focused, and I got myself out of a box.”
Over 244 pages he did not mention that he was being handed nearly 25 percent of his father’s empire.
.. The man who paid himself $50 million in 1990 died with just $1.9 million in the bank.
.. According to his estate tax return, his most valuable asset was a $10.3 million I.O.U. from Donald Trump, money his son appears to have borrowed the year before Fred Trump died.
..In 2003, the Trump siblings gathered at Trump Tower for one of their periodic updates on their inherited empire.
.. Donald Trump insisted that the real estate market had peaked and that the time was right
.. He was also, once again, in financial trouble. His Atlantic City casinos were veering toward another bankruptcy. His creditors would soon threaten to oust him unless he committed to invest $55 million of his own money.
.. Schron paid $705.6 million for most of the empire, which included paying off the Trumps’ mortgages.
.. Within a year of the sale, Mr. Trump spent $149 million in cash on a rapid series of transactions that bolstered his billionaire bona fides. In June 2004 he agreed to pay $73 million to buy out his partner in the planned Trump International Hotel & Tower in Chicago.
.. The first season of “The Apprentice” was broadcast in 2004, just as Donald Trump was wrapping up the sale of his father’s empire.
.. Had Mr. Trump done nothing but invest the money his father gave him in an index fund that tracks the Standard & Poor’s 500, he would be worth $1.96 billion today.