New York State Department of Taxation and Finance (“DTF”) announcement that it will investigate President Donald Trump’s estate comes at a time when the federal Internal Revenue Service (“IRS”) is pursuant of accurate reporting information about the presidential family’s wealth. Trump’s lawyers cite the 3-year federal and New York state statute-of-limitations in response to recent allegations that the estate aggressively undervalued properties on state and federal tax record. Properties reported on a gift or estate tax return form to the IRS and the state, however, make it unlikely additional disclosure will be required, and not after the statute runs out.
The Presidential Audit
A New York Times report suggests Donald Trump gave Fred Trump a $15.5 million stake in a Trump Palace development in exchange for forgiveness of loans to his son – an amount subject the federal 55% gift tax rate. Fred Trump apparently never reported the gift at the individual-level, nor is it reflected on the estate tax return, and this has the potential to involve Donald Trump an investigation due to his role as an executor of the estate. In 2000, the Fred and Mary Trump estate was audited. The audit included gift tax returns that had been audited in the 1990s, making any further investigation impossible as those records could not be reopened.