Here's how Trump transferred wealth to his son while avoiding the usual taxes

 In Science
In April 2016, as Donald Trump was on the cusp of clinching the Republican nomination for the White House, he sold two luxury condos near Manhattan’s Central Park for less than half the price his company had said they were worth. The lucky buyer: Trump’s son, Eric.

Such family-friendly deals would normally incur hundreds of thousands of dollars in gift taxes.

But in this case, Trump appears unlikely to have been on the hook for anywhere near that, thanks to benefits only available to real estate developers.

Eric Trump bought the two condos on the two top floors of the Trump Parc East building at 100 Central Park South for $350,000 each. Trump Organization filings show that, as of February 2016 — two months before Trump sold the apartments to Eric — the condos were priced at $790,000 and $800,000. A similar one-bedroom condo on a lower floor at the same building sold for $690,000 in 2014.

The transactions illustrate the unique advantages that real estate developers like Trump have when passing down valuable assets between generations.

“Not everyone has the opportunity to avoid gift taxes, just developers with developer units,” said Beth Shapiro Kaufman, an estate planning attorney and president at Caplin & Drysdale in Washington, D.C. “The biggest game in gift taxes is valuation issues.”

An owner who sells real estate for less than it’s worth would typically have to pay gift tax on the difference between the sales price and the true market value. Any personal gifts that are worth more than $14,000 in a year are subject to up to 40 percent in federal taxes.

But as the building’s developer selling the units for the first time, Trump had lots of flexibility within the law to determine the value of the apartments.

“This is really, really primo real estate,” said Bob Lord, a tax attorney who reviewed the transaction records at ProPublica’s request. “Why would you show a sale at $350,000 other than to play games for tax purposes?”

The units were originally rent regulated, which would typically lower the value of the apartments significantly.

New York City records state that the condos are no longer rent regulated. It’s not clear when they were deregulated, but the result is that Eric Trump will likely be able to sell the apartments at significantly higher prices. It’s also unclear if anyone currently lives in the condos. The younger Trump bought another, much larger, apartment in the building for $2 million in 2007.

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