Palm Beach Post Exclusive by Christine Stapleton and Lawrence Mower
December 21, 2017
Donald Trump’s deal with the town of Palm Beach to turn Mar-a-Lago into a private club hinged on an act of charity crafted to skirt IRS scrutiny and deliver for Trump a seven-figure tax break, a Palm Beach Post investigation has found.
To make sure Trump could get the $5.7 million deduction, America’s future president and his lawyers intentionally left out those details from the written agreement with town officials.
The deal, which took shape in public meetings over several months in 1993, provides the best look at Trump’s largest form of charity: an obscure and controversial land-use deduction known as a preservation easement.
Congress created the charitable deduction in 1969 as an incentive to conserve land and preserve historic buildings, but by the 2000s, it became widely abused by the wealthy. In such easements, owners donate control of property, be it land or historic features, to a nonprofit, reducing an estate’s value.
One way it was abused: Donors claimed the deduction when they got something in return, which means, in essence, that it wasn’t a charitable donation. In Trump’s case, he did get something in return: permission to turn the private residence into a money-making club.
At the time, the IRS did little to scrutinize such deals, tax experts told The Post, and even if they had, it would have been harder to confirm because the deal was not put in writing.
With little to worry about from the IRS, Trump stood to deduct $5.7 million in income from his 1995 tax returns, an amount never-before revealed publicly.
The Post discovered the appraisal, which Trump paid for to calculate the deduction, amid documents in a lawsuit he filed against Palm Beach County. Easement appraisals normally are considered private tax documents.
Trump has not released his tax returns so the status of the deduction is unknown. [READ MORE]