He stands on his shoulders. His dad, Fred Trump, started the real estate and construction business his son now runs. Fred Trump, who died in 1999 at the age of 93, was a controversial figure in his own life. Noted for his business successes, the elder Trump was alleged of racial discrimination against potential tenants.
Donald Trump has said, “My legacy has its roots in my father’s legacy.” A member of the most privileged demographic on the planet, Donald Trump was born on third base.
In October, The New York Times reported that Donald Trump and his siblings helped their parents dodge taxes and that the president received the equivalent of $413 million from his father’s real estate business.
By the time he was 3 years old, Trump was earning $200,000 a year in today’s dollars. By the time he was 8, he was a millionaire. Soon after graduating from college, Trump was receiving the equivalent in today’s dollars of $1 million annually from his father, Fred Trump. The inherence increased to more than $5 million annually when Trump was in his 40s and 50s. Fred Trump gave millions to his kids in a way that was structured to sidestep taxes on gifts and inheritances.
Experts told The Times the methods were suspect, possibly even illegal. When Donald Trump and his siblings gained ownership of their father’s real-estate empire in 1997, they dodged hundreds of millions in taxes by undervaluing the properties at just north of $41 million. The properties were later sold for 16 times that amount.
The Trump family in 1992 formed what The Times described as “the most overt fraud,” a company called All County Building Supply & Maintenance. Its purpose was to be a purchasing agent for Fred Trump’s buildings, but it did not function in that manner, The Times said. The company instead was used to siphon millions from Fred Trump’s empire by marking up purchases that were already made. The Times said it found 295 revenue streams Fred Trump created over 50 years. In 2004, the Trumps sold off Fred’s empire. And Donald Trump made $177.3 million off the sale. By 1990, Fred Trump had transferred today’s equivalent of at least $46.2 million to Donald Trump. He is worth $1.96 billion today. Donald Trump said his father gave him a $1 million loan, but Fred actually lent him $140 million in today’s dollars.
Trump’s parents transferred in total more than $1 billion in wealth to their kids, an amount that could’ve produced sizable taxes; instead, the Trumps paid just north of $50 million in taxes, receiving the equivalent today of at least $413 million from his father’s real estate empire, starting when he was a toddler and continuing to this day.
Much of Trump’s money came about because he helped his parents evade taxes. He and his siblings set up a sham corporation to disguise millions of dollars in gifts from their parents, records. Mr. Trump helped his father take improper tax deductions worth millions.
Fred Trump built his fortune by profiteering off the U.S. government. Donald Trump is proving to be much like his father.
William Reed is publisher of “Who’s Who in Black Corporate America” and available for projects via Busxchng@his.com.