After digging into Donald Trump’s financial disclosures and corporate filings, The Wall Street Journal found that the president-elect’s two planes and three helicopters are clouded in strange, convoluted business practices designed to save the real estate mogul millions in taxes.
The report found that Trump essentially leases his planes and helicopters to himself through a complex web of over 15 separate companies, many of them LLCs partially owned by the President-elect. If this sounds confusing, that’s because it is, as The Wall Street Journal demonstrates with Trump’s “Trump Force One” Boeing 757-200, saying:
The Plane…is owned by DJT Operations I LLC, a limited liability company owned by Mr. Trump. That company, in turn, leases the aircraft to Tag Air Inc., another Trump entity, which itself is owned by another limited liability company, DJT Operations II LLC, according to Federal Aviation Administration records.
Apparently this strategy of “leasing in-house” is not uncommon among jet owners, as the article says the method allows them to pay taxes on lease payments instead of on the initial purchase price, effectively dragging the tax out over a decade or more.
The business newspaper says this means that Trump could have brushed aside the upfront 8.875 percent New York sales tax on his $35 million Boeing, which the president-elect “internally leased” as soon as he bought it in 2010. The Walls Street Journal says this “translates to a saving of $3.1 million,” and goes on to say:
Instead, the sales tax due would have been about $170,000 a year, based on the $159,506 monthly rent shown in FAA records. And the tax bill could now be zero, because New York state changed its laws to stop charging sales taxes on most corporate jets as of September 2015.
The situation is similarly confusing with Trump’s old Sikorsky helicopter, as the report says:
…he has a revocable trust that owns 99% of a Delaware limited liability company that owns 99% of another Delaware LLC that owns a Scottish limited company that owns another Scottish company that owns the 26-year-old Sikorsky S-76B helicopter, emblazoned with a red “TRUMP” on the side of its fuselage.
And his real estate is no different, with the article saying half of the revenue in Trump’s financial disclosure actually came from “assets held in 96 different LLCs,” many of which are strategically registered in Delaware because of the state’s tax advantages.
The Wall Street Journal thinks the convoluted nature of Trump’s wealth, as exemplified by his jet and helicopter assets, makes it difficult to discern how many conflicts of interest America’s next president will face as he institutes reforms aimed at bolstering American businesses.
Read the whole article—including a big graphic showing all 15 companies with stakes in his jets and helicopter properties— on The Wall Street Journal.
source: gizmodo.com by David Tracy