Trump’s unused mansion falls under investigation for possible tax fraud

Trump’s unused mansion falls under investigation for possible tax fraud
White House photo

The latest financial disclosures filed by Donald Trump raise new questions about a large tax break he got on a Batman-like estate north of New York City.

The former president reduced his tax bill on the land listed as Seven Springs LLC by more than $3.5 million in 2015, when he first entered politics, and new filings show the property earned him less than $2,500 in the form of a vaguely labeled "rebate," although he valued the land at $50 million, reported The Daily Beast.

“There has been an enormous amount of valuation abuse," said Nancy Assaf McLaughlin, a national expert on conservation easements, who was speaking generally because she did not know the details of Trump's property. "People will come up with a ‘before value’ that exceeds anything a willing buyer would pay, using ‘subdivision development analysis’ and coming up with a hypothetical subdivision of lots."

“It has no relation to what somebody would actually pay you for that property on the open market," added McLaughlin, a law professor at the University of Utah. “Income tax deduction is inappropriately lucrative in those cases."

Trump has reported no income on the estate since he started filing federal disclosure forms required by some executive branch officials, and an expert compared his arrangement to a rancher who decided to leave their land to sit unused.

“Many ranchers are earning next to nothing on their farmland, but as soon as they give it up, they get a very generous tax break relative to what they were earning," said James Vercammen, a land economist at the University of British Columbia in Vancouver. "You’re going to learn a lot more from the tax break than what you’d earn from the land itself."

Trump had hoped to build a golf course and several mansions on the property, but local residents opposed any land development, so he instead cashed in on the tax break -- and New York attorney general Letitia James is now investigating the value he placed on the underdeveloped land.

“When an appraiser comes back with values that are lower than what Trump wants, he’ll get fired, won’t get paid, or they’ll hire another,” said a source who had seen some of Trump's transactions in recent years. “He’s extracted the highest possible he can find.”

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