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Trump’s Tax Returns Reveal Favored Financing for Ivanka and Her Siblings

James Mercado
Trump's Tax Returns Reveal Favored Financing for Ivanka and Her Siblings

Trump's Tax Returns Reveal Favored Financing for Ivanka and Her Siblings

Trump’s Tax Returns Reveal The fact that Donald Trump gave his three eldest children, Don Jr., Ivanka, and Eric, sweetheart loans that saved them a modest fortune and added mystery to the former president’s tax machinations are revealed in his tax returns.

Last month, investigators for Congress raised eyebrows with a report that raised questions about whether or not the loans were “disguised presents” and called for more inquiry. Trump’s tax returns were made public shortly thereafter by the House Ways and Means Committee.

For this reason, Forbes was able to compare the loan paperwork with Donald Trump’s personal financial statements and calculate the interest rates, demonstrating the loans’ generosity and suggesting why investigators could have been interested in them.

According to the papers, from 2015 through 2020, the younger Trumps paid their father approximately $50,000 per year in interest on a total debt of $4.55 million. An interest rate of 1.1% implies that the heirs made a total interest payment of that amount.

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Those versed in the nuances of the tax code may be alarmed by this low rate, as the Internal Revenue Service regulates the interest rates that parents can pay their heirs to discourage the transfer of large sums of money through phony loans. Long-term loans, defined as those with a maturity of more than nine years, have historically enjoyed interest rates far above 1.1%, as published monthly by the Internal Revenue Service.

Trump’s Tax Returns Reveal Favored Financing for Ivanka and Her Siblings

According to Donald Trump’s financial records, his children have been indebted to him for more than nine years. Is that why the Trumps’ interest payments were so low? Shorter-term loans allow borrowers to pay cheaper interest rates. Don Jr., Ivanka, and Eric may have borrowed from their father over a long period of time at reduced rates if the loans technically came with shorter durations but were regularly refinanced to effectively extend them.

Eric Trump appeared to drop hints about such a move in emails to Forbes, where he responded to inquiries about how he and his siblings could legally pay so little interest by attaching tables of historical rates for mid-term loans (those expected to last between three and nine years) and long-term loans. Please don’t think they were permanent,” he wrote in a separate message.

The loans have a history that spans several decades. Ivanka Trump told Oprah Winfrey in 2004 that she was going to receive property from her father after she graduated from Penn. The apartment she now calls home was a recent graduation present from her father. “I’m graduating, and I don’t want to live at home longer,” she said.

However, a deed showing that Ivanka had purchased the flat rather than received it as a gift appeared in New York City records that autumn. She paid $1.5 million, which is over $1 million less than what the property would have sold for if valued similarly.

Based on Donald Trump’s personal financial statements, it appears that his daughter Ivanka borrowed all the money she needed from him and was not required to make regular principal payments. Thirty-year bank mortgage rates were around 6% when the deal was made. Ivanka Trump gave her father only $18,000 a year from 2015 to 2020, the years for which Trump’s tax filings are publicly available.

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Ivanka nonetheless made use of the acquisition to flaunt her lack of parental dependence. Her two-bedroom condo in a Trump building was purchased by her own means, as she revealed in The Trump Card. “I didn’t even get an insider’s discount.” Not only did Ivanka downplay the significance of the fact that she received exclusive pricing, but she also made it seem like the financing for her purchase was the same as it would have been with a more conventional lender.

Trump’s Tax Returns Reveal

My brothers Don and Eric also have mortgages on their residences in different Trump buildings, and so do I. Although I make my mortgage payments to my dad instead of a bank, that doesn’t change the fact that I still have a mortgage.

Also, Eric Trump was given favorable terms that a bank probably wouldn’t have given. He reportedly borrowed $2 million from his father to finance the 2007 purchase of a $2.04 million apartment. If the elder Trump’s personal financial statements are to be believed, neither Eric nor Ivanka was required to make regular principal payments.

Interest rates on 30-year mortgages were over 6% when Eric bought his condo. But according to Donald Trump’s tax records, Eric paid $24,000 in interest over the course of four years (2015-2019), an average of 1.2 percent. With Trump in the White House and Eric at the helm of the family business, interest payments plummeted to $19,605 that year, or less than 1% of the loan’s principal.

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Don Jr. took a different course than his brothers and sisters by investing in various New York City apartment buildings. He paid off the mortgage on one of the apartments by making a profit of $855,000. However, he kept $1.05 million in debt against another property that his father apparently gave to him.

An examination of the Trump family’s financial records and tax filings revealed that Don Jr. paid the least interest of the three Trump children at just 0.8%, or $8,715 a year.

Assuming the Trumps followed standard procedure while structuring their loans, these preferential arrangements may have been perfectly lawful. Tax attorney and Cornell University professor Jill Miller adds, “I tell my law students there are two tax regimes out there—one for the knowledgeable and one for the uninformed.” “Informed people may make the most beneficial choices for their families.”

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