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Trump Faces Potential $100 Million Tax Bill from Questionable Chicago Tower Deductions

By
Emmanuel
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0

Former President Donald J. Trump may owe over $100 million in taxes due to a dubious accounting maneuver he used to claim improper tax breaks from his troubled Chicago skyscraper, according to an Internal Revenue Service inquiry uncovered by The New York Times and ProPublica.

The 92-story Trump International Hotel and Tower, which opened during the Great Recession, has been a massive financial loss for Mr. Trump. However, when seeking to reap tax benefits from these losses, the I.R.S. argues that he went too far, effectively writing off the same losses twice.

In 2008, Mr. Trump claimed on his tax return that his investment in the tower was “worthless” due to the project’s debt, resulting in reported losses as high as $651 million for that year.

Then, in 2010, he executed a maneuver to extract further benefits, shifting the company that owned the tower into a new partnership and using this shift to declare an additional $168 million in losses over the next decade.

The I.R.S. undertook a high-level legal review of the case during Mr. Trump’s presidency before pursuing it. The Times and ProPublica, in consultation with tax experts, calculated that the revision sought by the I.R.S. would create a new tax bill of more than $100 million, plus interest and potential penalties.

The outcome of this dispute could set a precedent for wealthy individuals seeking tax benefits from the complex laws governing partnerships. The six tax experts consulted for this article believe that Mr. Trump’s accounting maneuvers appear questionable and unlikely to withstand scrutiny.

This audit represents another potential financial threat for Mr. Trump, who is already facing significant financial judgments in other cases. Reporting by The Times has found that throughout his business career, Mr. Trump has often used highly aggressive, and at times legally suspect, accounting maneuvers to avoid paying taxes.

The I.R.S.’s position is that Mr. Trump’s 2010 merger violated a law meant to prevent double dipping on tax-reducing losses. If the agency prevails, Mr. Trump would need to amend his tax returns from 2011 to 2017, removing $146 million in losses and adding up to $218 million in income from condominium sales, potentially resulting in a tax bill exceeding $100 million.

The Chicago audit was briefly mentioned in a December 2022 congressional report, confirming that it was still underway and could affect Mr. Trump’s tax returns from several years.

Tax experts expressed surprise that the I.R.S. did not initiate an audit of the 2008 worthlessness deduction, suggesting that the understaffed agency may have missed the deadline to investigate it and is now attempting to make up for that oversight by auditing the 2010 merger transaction.

The I.R.S.’s difficulty in keeping up with Mr. Trump’s maneuvers highlights the need for Congress to reform the rules surrounding the worthlessness deduction, according to tax experts. The outcome of this audit could have significant implications for Mr. Trump’s financial future and the broader landscape of partnership taxation.

Credit: TheNewYorkTimes.com

Russia Rains Missiles, Drones, and Artilleries on Kharkiv-Sets to Capture City

By
admin
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0

In a chilling escalation of the ongoing conflict, Russia unleashed a punishing wave of missile, kamikaze drone, and artillery attacks on the Ukrainian city of Kharkiv last night.

The bombardment has raised fears that Vladimir Putin may be seeking to seize Ukraine’s second-largest city, as shocking images and videos from the devastated metropolis show several residential buildings ablaze and rubble littering the streets.

Olena Kurylo, a 54-year-old teacher who gained international recognition as the ‘Face of the War’ after her home was destroyed in Moscow’s initial assault on February 24, 2022, expressed the growing concern among Kharkiv’s residents.

“We are not sleeping, again, just now was the tenth air raid alert of the night,” Olena told reporters, exhausted from yet another sleepless night. She feared that this attack could be “the start of the Kharkiv assault – and that we will all perish here.”

Despite the relentless bombardment, Olena and many other residents remain defiant, refusing to leave their homeland. “This is our land. This is home. There is no reason why our huge neighbour is destroying us.

There is no excuse for millions of broken lives,” Olena said, turning her ire towards Russian President Vladimir Putin, whom she described as a “mental, ugly, impotent old man, the deranged maniac.”

Governor Oleh Sinehubov reported that three residential houses were set alight and destroyed, with dozens more damaged in the overnight attack, which targeted both infrastructure and residential areas.

Two people, including an 11-year-old child, were injured in the strikes, though no deaths have been reported thus far.

Ukraine’s air defence systems successfully destroyed 10 attack drones, but two guided missiles launched by Moscow’s forces are believed to have caused the damage to residential buildings.

The intensified strikes on Kharkiv come just one day after Ukraine announced limitations on power supplies across the country and warned of possible blackouts following a ‘massive’ wave of Russian missile and drone attacks targeting the country’s battered energy system.

Ukrainian President Volodymyr Zelensky condemned Russia’s attack as “deliberate, calculated, and sneaky,” emphasizing that the strikes targeted civilian infrastructure and life itself.

Despite the escalating attacks, Ukraine has demonstrated its ability to strike back, destroying another oil refinery in Russia’s Kaluga region with a kamikaze drone attack yesterday.

Footage showed a massive inferno at the First Plant processing facility, occurring just hours after Ukraine flew another attack drone across almost 950 miles of Russia – a record distance – to impact the giant Salavat plant in Bashkortostan.

As the conflict continues to rage, Russian President Vladimir Putin has opted for continuity in his government, re-appointing technocrat Mikhail Mishustin as prime minister.

Mishustin, credited with guiding Russia through the chaos inflicted by Putin’s decision to go to war, is seen as a sign of stability in the face of the ongoing conflict.

The world watches with bated breath as the situation in Kharkiv and the surrounding regions continues to unfold, with the resilience of the Ukrainian people being tested once again in the face of relentless Russian aggression.

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