President TrumpDonald John TrumpTrump admin to announce coronavirus vaccine will be covered under Medicare, Medicaid: report Election officials say they’re getting suspicious emails that may be part of malicious attack on voting: report McConnell tees up Trump judicial pick following Supreme Court vote MORE had $287 million in debt forgiven within the past decade, with most of it related to his Trump International Hotel & Tower in Chicago, The New York Times reported on Tuesday.
The Times, citing federal income tax records that it obtained, reported that lenders forgave hundreds of millions in debt since 2010 that Trump did not repay, amounting to most of what Trump had owed.
His lenders, Deutsche Bank and the hedge fund Fortress Investment Group, gave Trump leeway, including extra time to pay his loans, the newspaper reported, citing information from tax returns, interviews and other records.
New York Attorney General Letitia James’s (D) investigation into Trump’s business includes questions about the forgiven debts, the Times noted, as the Internal Revenue Service mandates forgiven debts to be taxed as income.
But the newspaper reports that Trump’s tax records appear to show the current president paid almost no federal income tax on the forgiven debts partly due to large losses in other businesses.
Alan Garten, the Trump Organization’s chief legal officer, told the Times that the company and Trump appropriately paid for all taxes due on the forgiven debt.
“These were all arm’s length transactions that were voluntarily entered into between sophisticated parties many years ago in the aftermath of the 2008 global financial crisis and the resulting collapse of the real estate markets,” Garten said.
The Hill has reached out to the Trump Organization for comment.
Deutsche Bank agreed to loan Trump’s LLC $640 million for the Chicago project, including $40 million personally guaranteed by Trump. He also borrowed $130 million from Fortress Investment Group as part of a deal with a double-digit interest rate and an additional fee of $49 million when repaying the loan, the Times reported.
The agreements were signed in 2005 and originally due May 2008, when Trump expected to have generated enough money from the property to pay off the loans. But construction delays and the lack of selling of condos and real estate space resulted in the company not having the money in time.
As the financial crisis began to develop, Trump asked for and received a six-month delay for the loan repayment for Deutsche Bank, and when that deadline came, the bank refused future postponement. At that time, Trump owed Deutsche Bank about $334 million with interest and Fortress about $130 million without interest, the Times reported.
Trump filed a lawsuit against the lenders, saying Deutsche Bank engaged in “predatory lending practices.” Deutsche Bank filed its own lawsuit against the future president, requesting repayment of the loans. The two sides settled privately in 2010.
Trump’s federal tax returns and loan documents filed in Cook County, Illinois, appear to show that he was no longer held responsible for paying some $270 million, the Times found.
Fortress had originally expected to be paid more than $300 million from Trump’s business but instead settled for $48 million, people familiar with the deal told the newspaper.
The Times reported that the forgiven debts appeared in the federal tax returns, with Trump’s 401 Mezz Venture reporting about $181 million in canceled debts in 2010, and DJT Holdings, the umbrella company for the Chicago project, reporting $105 million forgiven in 2012.
Steven Schlesinger, a lawyer who represented the Trump Organization in the Chicago legal battle, told the newspaper that the 2010 settlement allowed Trump time to garner more money to pay what he owed. The Trump Organization paid about $235 million of the Deutsche Bank loan by 2012.
But the current president paid the last $99 million to the bank through other Deutsche Bank loans that he agreed to personally guarantee in 2012. The loans will be due in 2023 and 2024.
The article is the latest from the Times that includes information surrounding Trump’s tax returns.
Democratic presidential rival Joe BidenJoe BidenDemocrats warn GOP will regret Barrett confirmation Trump campaign eyes election night party at his sold-out DC hotel Harris blasts GOP for confirming Amy Coney Barrett: ‘We won’t forget this’ MORE renewed his call at last week’s debate for Trump to release his tax returns after the Times reported that Trump maintains a Chinese bank account. A lawyer for the Trump Organization said the account was still open but its offices in China were inactive since 2015.
The newspaper also reported last month that Trump paid just $750 in federal income taxes in each of 2016 and 2017. The president said at the debate that he “prepaid” tens of millions of dollars, suggesting the $750 was a “filing fee.”