The left-wing media is out with a report claiming that former President Donald Trump has far less money at his immediate disposal than it appears.
“That bottom line was reflected in new documents filed last week by New York Attorney General Letitia James in her $250 million fraud lawsuit against Trump, three of his adult children, and his businesses,” The Daily Beast reported Wednesday.
“Those documents show that Trump—a billionaire on paper—only had control over about $65 million in liquid assets as he prepared to depart the White House,” the far-left outlet added.
While that’s a lot of money to the average American, it’s nothing to a multibillionaire.
But what explains him having so little money available to him?
Citing “accounting experts,” The Daily Beast reported that the bulk of Trump’s “ordinary income is reported as interest income and derived from pass-through entities.”
In other words, “[h]is tax returns are not intended to report if this income was actually distributed to him—they only indicate what income is attributed to him as an owner or investor.”
This finding is reportedly central to James’ lawsuit, which argues that when Trump applied for loans, he pointed to his inaccessible wealth as collateral, even though it was under the control of another party — the real estate firm Vornado.
“Citing Trump Organization financial statements, James points out that of the $92.7 million that Trump held in liquid assets in 2020, $28.25 million of that amount was tied up in ‘partnership entities Mr. Trump did not control as Mr. Trump’s own liquidity.’ In some years, she said, ‘these restricted funds accounted for almost one-third of all the cash reported by Mr. Trump,'” according to The Daily Beast.
If this is true, said Mark S. Gottlieb, a forensic accountant and tax law “expert” in Manhattan, then the money is essentially “phantom income.”
“As phantom income, he can’t touch it, feel it, smell it, or use it,” Gottlieb said to The Daily Beast.
But it was “phantom income” that Trump repeatedly relied on when reporting income.
“In 2020—when Trump’s hospitality-oriented businesses were reeling from the pandemic and he paid no income tax—that phantom cash may have accounted for as much as 90 percent of the income, as represented on the return,” according to The Daily Beast.
In his 2020 federal income tax return, Trump reported $10.6 million in interest income, a $9.74 million majority of which was under the control of Vornado.
“As James’ lawsuit points out, Trump is a minority member in those properties, has no control over his stake, and cannot access it whenever he wants—in other words, phantom income,” The Daily Beast notes.
“That headline $10.6 million is nice, but it appears to be mostly interest income from pass-through entities related to Vornado, not entities Trump actually controls and manages,” Gottlieb said.
“The self-proclaimed billionaire only earned an actual income of around a million dollars. But for his wages as president and his dividends from those inaccessible partnerships, Trump’s actual income that year was more like $500,000 or $600,000. Not a lot of money for a billionaire,” he added.
Francine Lipman, a tax law “expert” at the University of Las Vegas Nevada, reportedly concurred with Gottlieb’s assessment.
“When you look at this tax return, the first impression is, boy that’s a lot of interest income! But then you do a deep dive and the vast majority is from pass-through entities, and some of these partnerships are more second- or third-degree partnerships where he’s not just going to be able to put money from left pocket to his right pocket,” she said.
“There appears to be very little in banks that is actually accessible. Between the banks that we can recognize—Professional Bank? What is that? I haven’t heard of it—it looks like he’s got around half a million in interest income that he can actually touch. Not $10 million,” she added.
But a third expert, forensic accountant Bruce Dubinsky, “warned against making a guess at Trump’s true assets, citing the many unknowns that can lurk in complex returns,” according to The Daily Beast.
But Dubinsky did agree that the amount of money that Trump’s reported as income that isn’t actually accessible to him is a big deal.
“It appears from a review of Trump’s tax returns, based on the interest and dividends he was reporting, that a large portion of the interest income was coming from various partnerships in which he apparently was not the controlling partner. As a result, he would not have had ready access to the underlying funds generating that interest income from those partnerships,” he said.
“Accordingly, based upon my rough calculations taking that interest income out of the equation, his true liquid net worth was significantly less than the amount he has touted publicly,” Dubinsky added.
Jordan Libowitz, the communications director for government watchdog Citizens for Responsibility and Ethics in Washington, believes all this explains some of the financial decisions Trump has made.
“2020 is an interesting year. He’s all-in on the hospitality industry, which was falling apart amid the pandemic, even with all the people trying to patronize his properties,” Libowitz told The Daily Beast.
“And it would not surprise me if he’s struggling to access cash, especially as banks have become reticent to lend him money. It’s why he needs Truth Social to come through,” he added.
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