US President Donald Trump’s son-in-law and senior adviser Jared Kushner likely paid little to no income taxes during the period of 2009-2016, the New York Times reported Saturday, citing confidential documents it had obtained on Kushner’s finances.
Though he made many millions of dollars in real estate deals during the period in question, Kushner took advantage of tax provisions to declare huge losses that he did not actually suffer, in order to avoid paying for his earnings.
A loophole in the US tax code allows investors to declare losses over properties due to their assumed depreciation over time. While the law is intended to protect investors from losses due to wear and tear, it is often used by the wealthy to get tax breaks.
The newspaper noted that Kushner’s actions appeared to be entirely legal.
A spokesman for Kushner’s lawyer would only say that “Mr. Kushner properly filed and paid all taxes due under the law and regulations.”
Last year the Trump administration passed a major tax reform that critics have said mostly benefited the rich.
Victor Fleischer, tax law professor at the University of California, told the Times: “The Trump administration was in a position to clean up the tax code and promised to get rid of some of the complexity that certain taxpayers use to their advantage. Instead, they doubled down on those provisions, particularly the ones they have familiarity with to benefit themselves.”
Kushner’s spokesman said the Trump adviser had “avoided work that would pose any conflict of interest.”
On October 3 the Times reported that Trump received at least $413 million from his father over the decades, much of that through dubious tax dodges, including outright fraud.
The Times said Trump and his father, Fred, avoided gift and inheritance taxes by setting up a sham corporation and undervaluing assets to tax authorities. The Times said its report was based on more than 100,000 pages of financial documents, including confidential tax returns from the father and his companies.
A lawyer for Trump, Charles J. Harder, told the Times that there was no “fraud or tax evasion” and that the facts cited in the report are “extremely inaccurate.”
The White House dismissed the report as a “misleading attack against the Trump family by the failing New York Times.” It criticized the newspaper and other media outlets, saying their low credibility with the public is “because they are consumed with attacking the president and his family 24/7 instead of reporting the news.”
The New York State tax department told The Associated Press that it was reviewing the allegations and “is vigorously pursuing all appropriate avenues of investigation.” The department typically refers findings to the state attorney general’s office.
The Times said the Trump family hid millions of dollars of transfers from the father to his children through a sham company owned by the children called All County Building Supply & Maintenance. Set up in 1992 ostensibly as a purchasing agent to supply Fred Trump’s buildings with boilers, cleaning supplies, and other goods, the father would pad invoices with markups of 20 percent or even 50%, thereby avoiding gift taxes, the newspaper reports.
The Times said that before Fred Trump died in the late 1990s, he transferred ownership of most of his real estate empire to his four living children. The value of the properties in tax returns summed up to $41.4 million, vastly less than the Times said they were worth.
The same properties would be sold off over the next decade for more than 16 times that amount.
In total, the president’s father and mother transferred over $1 billion to their children, according to the Times tally. That should have produced a tax bill of at least $550 million, based on a 55% tax on gifts and inheritance at the time. Instead, the children paid $52.2 million, or about 5%.
Tax experts cited in the report said that Trump is unlikely to face criminal prosecution in helping his parents evade taxes because the maneuvers occurred long ago and are past the statute of limitation.
When he was campaigning, Trump repeatedly boasted of his ability to turn a small loan from his father into his fortune. “My father gave me a very small loan in 1975,” he said, “and I built it into a company that’s worth many, many billions of dollars.”
AP contributed to this report.