Reply to Blockbuster NY Times Investigation - Trump's Tax Schemes To Gain Riches From His Father

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[quote=Anonymous][quote=Anonymous]

"Instead All County siphoned millions of dollars from Fred Trump’s empire by simply marking up purchases already made by his employees. Those millions, effectively untaxed gifts, then flowed to All County’s owners — Donald Trump, his siblings and a cousin. Fred Trump then used the padded All County receipts to justify bigger rent increases for thousands of tenants."

I honestly don't understand what was going on here. I'm guessing the bigger rent increases may have had to do with rent control or housing subsidies, but I don't entirely understand the other part. "Purchases already made" -- so Fred Trump, Inc, has employees who order a $5000 boiler for a building. Fred Trump, Inc. pays for the boiler? Or does All Country pay? Who pays the actual price and who pays the markup? Sorry, if I had studied finance or accounting I might understand this concretely (which I really want to do) but would love for someone to walk me through it. 
[/quote]

All Country was inflating the invoices - lying about the actual costs of products and services purchased.  They did this in order to increase their actual expenses for supplies for their buildings.  The  higher their expenses, the more they could increase their rents.  Rental control rules, and the amount you get in government subsidies and loans to run these apt buildings are based on these types of expenses.  You can justify higher rents if your expenses are at a certain level.

Also by inflating the invoices for All Country, their tax liability was lower - higher expenses (while a lie) lowers your profits, thus lowering the amount you pay to the IRS.

It was a total tax and government defrauding scheme - totally illegal.

My bet is Donald Trump continues these fraudulent schemes in his business today.[/quote]

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