Could someone with more familiarity with tax law than I please answer this question: If I get someone else to pay off my $250,000 mortgage, I believe I have to list that as a gift and pay taxes on it. If that is true, then wouldn't Donald Trump have to list the $258,000 in legal expenses his foundation paid for Trump or his businesses as a gift on those tax returns and also pay tax on that money?
Yes, the use of the Trump Foundation to pay these expenses is illegal but that is a Foundation issue. Trump can just reimburse the Foundation and pay the excise tax which in the Bondi incident was 10%, unless, of course, the IRS determines that the self-dealing was "willful and flagrant" and actually terminates the Foundation.
However, to me, the more important issue is the one of potential tax evasion by Trump or Trump entities by using the Foundation money. In fact, Lynne Patton, the vice president of Eric Trump's foundation pretty much described that pattern as business as usual. "A lot of times Mr. Trump will give a speech somewhere or he'll raise money in some way and he asks that entity, rather than cutting a personal check to him, cut it to his charity. That's money that would have been in his personal account, right? So when he cuts a check from his foundation for, let's say, St Jude, it is his money. No ifs, ands, or ways about it." Well, no, that's not how it works. By cutting the check to the foundation, Trump avoids paying income tax on that and the person giving the money also gets a tax deduction. If Trump can then use that money as his own to pay legal expenses and such, it seems to me to be a clear case of tax evasion. Which is probably just another reason why he refuses to release his taxes.
If I am wrong about this, please let me know. But, if not, why is the press not all over this aspect of the Trump Foundation scandal?
Update: A reliable tax attorney has informed that Trump would not be responsible for reporting this on his tax returns and that even I do not have to list the mortgage that someone paid off for me as a gift. Thanks for the responses.
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