- President Trump could face a $100 million tax bill after the IRS says he tried to write off the same loss twice.
- The loss is related to the 92-story Trump International Hotel and Tower in Chicago.
- The IRS conducted a “high-level legal review” before launching the investigation, the Times reported.
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Former President Donald Trump has announced that he could be hit with a $100 million tax bill following an IRS announcement. Tried to write off the same loss twice The New York Times and ProPublica report on his struggling 92-story Chicago skyscraper.
Trump International Hotel and Tower Chicago, built on the site of the former Chicago Sun-Times headquarters, opened in 2009 during the Great Recession. The vast condominium-hotel project was plagued by cost overruns, the report said.
In an Internal Revenue Service investigation obtained by the Times and ProPublica, the agency said Trump tried to claim tax breaks from economic losses related to the project, effectively writing off those losses twice.
President Trump first reduced Chicago Tower’s taxes on his 2008 tax return, when the building’s sales were lower than expected. Mr. Trump argued that his share of the investment in the building amounted to an amount that would be classified as “worthless” under tax law. The main reason was that he had shown that the debt owed on the building was not profitable.
Trump said on his tax return for the same year that he lost up to $651 million on the project, according to the Times and ProPublica.
The Times and ProPublica reported that there was no initial sign of pushback from the Internal Revenue Service over Trump’s initial claims, which surprised tax experts who spoke to the media.
In 2010, Mr. Trump and his tax advisers sought to further profit from the skyscraper project by moving the company that owned the skyscraper into a new partnership. But Trump took control of both companies. Over the next 10 years, he attempted to use this business move to claim another $168 million in losses.
Due to the nature of Trump’s claims, the IRS conducted a “high-level legal review” before launching an investigation, the report said.
After reviewing the findings, the Times, ProPublica, and tax experts believe that the amendments sought by the IRS would impose an updated tax liability of more than $100 million on President Trump, not including any additional penalties. I concluded that.
Eric Trump, executive vice president of the Trump Organization, responded to the report, saying the company is “confident” in its actions regarding the Chicago skyscraper.
“This issue was resolved years ago, but it only came back to life when my father ran for office,” he said in a statement to the Times and ProPublica. “We are confident in our position, supported by written opinions from a variety of tax experts, including a former general counsel for the IRS.”
Business Insider has reached out to the Trump campaign for comment.
News of the IRS investigation comes during a presidential year in which President Trump is expected to return to the polls, and the extent of his personal assets and wealth remains a key issue in the campaign.
In January, a court ordered President Trump to pay $83.3 million in defamation damages to author E. Jean Carroll. (In a separate civil trial last year, a New York jury found the former president responsible for sexually abusing Carroll.)
And in February, a New York judge ordered Trump to pay $355 million in fines in what the judge said was a scheme by the former president to fraudulently inflate the value of his estate. Prosecutors then obtained $175 million bail from Trump in a civil fraud case in April, which the former president posted to block a larger verdict pending an appeal.