The Trump ''Haircut''

originally posted by: network dude

originally posted by: TerryMcGuire
a reply to: Mahogany

Yet it also states in the article that all of this has been taken into account by the defense which mean that the banks were not victim here at all. Does this hold true for the taxes owed? I don' t ,know. I wonder if that is standard banking practice or even standard practice for Trump, why inflate his worth in the first place. Why lie. Cuz he wanted to climb the Forbe's richest list?

if you inflate the worth of something, wouldn't that also increase the tax liability if the income or valuation was involved?

No, because the banks don't tax you.

He would inflate the values to the banks when he seeks loans, secure more favorable interest rates and higher loans, but then would undervalue them at other times to secure better tax rates from the government -- or claim losses for years and pay no taxes at all. All the while he was claiming immense profits to the banks.

All this up and down in values also affects the insurance companies, but that hasn't been ruled on yet, that's a part of the trial. Insurance fraud.

As a side note, he's also claiming that since he was making payments on time there was no fraud. No court will accept this strawman argument, they are unrelated. That would mean that if I lie to a bank and give them false information to basically steal money from them, it is not fraud until I miss a payment. We all know that's not true. Fraud is not related to timely payments.

originally posted by: network dude

originally posted by: Mantiss2021
a reply to: TerryMcGuire

I wonder if the bank's "haircut" valuation(s) were ever communicated to Trump and/or his organization?

what is the fudge ratio in giving your numbers to the bank? Do you have to be exact, or is there a percentage where it's fraud vs. dumb? Thanks in advance for your well sourced answer!

I've never worked for a bank, so I do know what, if any, "fudge factor" might exist regarding the valuation of collateral and such.


I Do have more than 20 years as a state tax agent (retired), and then two more years as a paid tax preparer.


As such , I know that overvalued business assets can be the basis of fraudulent loss deductions, which are then used to offset taxable income from other assets.

Don't know it that is the case here, it would require a deep audit of the corporate and personal state and federal tax documents... and a forensic comparison of those documents to both personal and business accounting documents.

Basically, a "financial colonoscopy".

a reply to: Mantiss2021

Super! We should get the real facts with you. So what amount of difference is allowed, and where is the (you are going to jail) line at with taxes?

originally posted by: Mahogany

originally posted by: network dude

originally posted by: TerryMcGuire
a reply to: Mahogany

Yet it also states in the article that all of this has been taken into account by the defense which mean that the banks were not victim here at all. Does this hold true for the taxes owed? I don' t ,know. I wonder if that is standard banking practice or even standard practice for Trump, why inflate his worth in the first place. Why lie. Cuz he wanted to climb the Forbe's richest list?

if you inflate the worth of something, wouldn't that also increase the tax liability if the income or valuation was involved?

No, because the banks don't tax you.

He would inflate the values to the banks when he seeks loans, secure more favorable interest rates and higher loans, but then would undervalue them at other times to secure better tax rates from the government -- or claim losses for years and pay no taxes at all. All the while he was claiming immense profits to the banks.

All this up and down in values also affects the insurance companies, but that hasn't been ruled on yet, that's a part of the trial. Insurance fraud.

As a side note, he's also claiming that since he was making payments on time there was no fraud. No court will accept this strawman argument, they are unrelated. That would mean that if I lie to a bank and give them false information to basically steal money from them, it is not fraud until I miss a payment. We all know that's not true. Fraud is not related to timely payments.

obviously based on this testimony, the bank fraud portion of this is totally pointless. So we are left with a tax fraud issue that has been brought in a civil suit by a state attorney. Is that the proper way to deal with a federal tax issue?

originally posted by: network dude
a reply to: Mantiss2021

Super! We should get the real facts with you. So what amount of difference is allowed, and where is the (you are going to jail) line at with taxes?

Where state and federal taxes are concerned, there is no "fudge factor". Zero.


My source for this "real fact"?


Look at IRS form 1040 (or any of the 1040-series Personal income Tax forms), just above the signature line where the taxpayer signs the return, where it states, right on the form itself;


"Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of my knowledge and belief, they are true, correct, and complete."



A few points to note, particularly with regard to the question of responsibility for what is reported on the return:

Note the phrase "...I have examined...", which places the legal responsibility for all that is included on the return squarely upon the taxpayer, not his accountant, CPA, tax preparer, bank loan officer, business employees, or anyone else.

Note also, the phrase "...this return and accompanying schedules and statements...", which refers to the documents used to derive the values claimed and reported on the return. Values, which, if were in dispute based on professional evaluation (ie.: by a bank, or qualified appraiser), would have to be supported by documentation included with the return as filed.

And Note, "...to the best of my knowledge and belief, are true, correct, and complete...", which goes to my initial question, "Was Trump (or his organization) made aware of the scope of the bank's "haircut" valuations in the course of their dealings?"

If he was made aware, but then used (or either directly or indirectly authorized the use of) his own (untrue, incorrect, and/or incomplete) statements, he would be guilty, at least, of perjury.


As I noted, there is no "fudge factor" allowed.


Errors which result in an underreported tax liability will be subject to penalties and often interest, and will be required to be corrected.


Errors which results in underreported taxes amounting to 20% (I think that is the threshold, it's been years since I retired, and I have been working to excise such minutiae from my memory!) or more of the actual tax liability can be prosecuted.

a reply to: network dude

We need an emoticon that symbolizes a huge disappointed sigh..................... maybe this one

a reply to: Mantiss2021

This is how I figured it. However, is he being tried for tax evasion or for falsifying his tax returns ? Has this been brought forth in the indictments? And if this is part of the suit against him, that wouldn't be a civil trial would it?

a reply to: Mantiss2021

so this is all a federal tax issue that the NY AG decided to try as a civil case? Can that even be done?

originally posted by: network dude
a reply to: Mantiss2021

so this is all a federal tax issue that the NY AG decided to try as a civil case? Can that even be done?

No, this not "all a federal tax issue"; neither I nor anyone else on this thread has claimed it to be such.


In one of your previous posts on the thread, you inquired about a "fudge ratio" for reporting values to a bank.


I responded to your post, stating upfront that my experience, was not with banks, but through knowledge and experience as a state tax agent and paid tax preparer.

You then replied to my post;

"Super! We should get the real facts with you. So what amount of difference is allowed, and where is the (you are going to jail) line at with taxes (emphasis mine)?

To which my direct response clearly states, in the first sentence, the qualification "Where state and federal taxes are concerned..."


You originally asked about accuracy. I offered a qualified example of accuracy standards for taxation. You asked for supporting facts. I responded to your inquiry with documentation from an IRS form.



You are the one who appears to be trying to conflate the charges of "business fraud" with federal tax issues.

a reply to: Mantiss2021

I am trying to understand where the fraud is. Trump lied about the value of his property, super. Everyone does. That's why banks use appraisers. Which is the very crux of this thread. The banks, (the one's the idiot AG seems to think were defrauded) used their own numbers to value the property and Trump's net worth. The guy from the bank testified to that. Which in non clown world would have ended this on the spot. But as we aren't there now, this will go on, without anyone to explain it in any way that make logical sense.

I do appreciate your expert opinion on the tax part. And that begs the question as to why this is a civil suit and not a federal tax suit. I'd ask you to explain that, but I think that ship has sailed.

It is good to know you aren't a lawyer, as that part had me a bit scared.

a reply to: network dude

Trump is supposedly guilty (based on the summary judgment) of fraud, as I gather, stemming from lying on financial documents which he used in business transactions.

If we could determine exactly what documents are being referenced (are they available to the public? Are they part of the evidence submitted which resulted in the judgment?), it might be possible to discover whether a legal attestation of accuracy, such as appears on the IRS form I referenced, is integral to those forms.

I would not be surprised to learn that a similar oath is a part of many business and financially-related documents.


But, at this stage, we do not know.