Trump

The Trump real estate case reminded me of a personal situation. At one time I owned a business and when I wanted to depreciate the business I had to separate the value of the land from the building. I asked the IRS how to do this and was told that I should place a value on the business and if they disagreed they would let me know. Fortunately the business was on one lot and there was another empty lot attached so I just used the value of the empty lot for tax purposes. The point is that since the land cannot be depreciated it was to my advantage to place most of the value on the building which is what most people do. If they go overboard then the IRS challenges the value. Trumps case in New York is about placing the value on real estate. The only way the true value can be determined is by the rule, the value is what a willing buyer will pay a willing seller but if there is no sale then it is up to the two parties to agree on a value. This is what happened between Trump and the bank. When the time period was over the bank made money and Trump got his loan. Then the government steps in and says the property was overvalued by Trump. New York Attorney General Letitia James campaign pledge to probe former President Trump's business dealings, a promise she made before she even set foot in office, could make her vulnerable to an upset in her bid for reelection. The judge in the case is Arthur Engoron. Last week, Engoron ruled that Trump committed years of fraud by exaggerating his wealth and the value of assets on financial statements he used to get loans and make deals. As punishment, the judge said he would dissolve some of Trump’s companies — a decision that could cause him to lose control of marquee New York properties, like Trump Tower. Trump's defense is that it is standard practice in the real estate business to estimate the value of property and when applying for a lone to estimate on the high side. The bank on the other hand must secure its loan by estimating on the low side. Where the two meet is as close as you can get to the willing seller, willing buyer scenario without having a sale. Both James and Engoron have shown open disdain for Trump so he will likely be found guilty and then will appeal.