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OP
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Boys at lunch were talking about how years ago Trump's father managed to have assets valued at $200 million for the IRS estate taxes, but also at $900 million to back loans. I don't know anything about this issue. Anyone recall what was going on here?
It takes a village to raise an idiot.
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Campfire Ranger
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OP
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It takes a village to raise an idiot.
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Campfire Ranger
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Here is all you really need to know about Trump's inheritance . . .
Matthew 25:15-30
For the kingdom of heaven is as a man travelling into a far country, who called his own servants, and delivered unto them his goods.
15 And unto one he gave five talents, to another two, and to another one; to every man according to his several ability; and straightway took his journey.
16 Then he that had received the five talents went and traded with the same, and made them other five talents.
17 And likewise he that had received two, he also gained other two.
18 But he that had received one went and digged in the earth, and hid his lord's money.
19 After a long time the lord of those servants cometh, and reckoneth with them.
20 And so he that had received five talents came and brought other five talents, saying, Lord, thou deliveredst unto me five talents: behold, I have gained beside them five talents more.
21 His lord said unto him, Well done, thou good and faithful servant: thou hast been faithful over a few things, I will make thee ruler over many things: enter thou into the joy of thy lord.
22 He also that had received two talents came and said, Lord, thou deliveredst unto me two talents: behold, I have gained two other talents beside them.
23 His lord said unto him, Well done, good and faithful servant; thou hast been faithful over a few things, I will make thee ruler over many things: enter thou into the joy of thy lord.
24 Then he which had received the one talent came and said, Lord, I knew thee that thou art an hard man, reaping where thou hast not sown, and gathering where thou hast not strawed:
25 And I was afraid, and went and hid thy talent in the earth: lo, there thou hast that is thine.
26 His lord answered and said unto him, Thou wicked and slothful servant, thou knewest that I reap where I sowed not, and gather where I have not strawed:
27 Thou oughtest therefore to have put my money to the exchangers, and then at my coming I should have received mine own with usury.
28 Take therefore the talent from him, and give it unto him which hath ten talents.
29 For unto every one that hath shall be given, and he shall have abundance: but from him that hath not shall be taken away even that which he hath.
30 And cast ye the unprofitable servant into outer darkness: there shall be weeping and gnashing of teeth.
"All that the South has ever desired was that the Union, as established by our forefathers, should be preserved, and that the government, as originally organized, should be administered in purity and truth." – Robert E. Lee
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Say Fred Trump and partners bought a building for $1 billion and put 10% down borrowing the other $900 million, say Fred gets 1/3rd of the profits for managing the deal. He's now got assets that secured $900 million in loans and since he's the developer, he may well be personally guaranteeing the loan. But if he dies, the IRS is going to look at it as he owns 1/3rd of a $1 Billion building and has $300 in assets. Add in the fact that that his agreement with his 10 partners says a partnership interest can't be sold outside the partnership. .The only people on earth who can legally buy Trump's 1/3rd are those 10 people, that knocks the value down signficantly from the original $300 Million since the pool of potential buyers is now miniscule.
A bank/lender is mainly going to care that assets generate cash flow to pay back the loan. A lot of Trump, Sr. (and any real estate investors) assets aren't going to be straight up ownership, it's going to be owning a portion of a property, long term leases, or holding a management contract that allows them to run the show and get a percentage of the profits that may not be the same as their ownership stake in the property. Lenders are going to value these higher due to the cash flow they throw off, they tend to value stuff more as a going concern, but these things are going to be hard to sell as there isn't a tremendous pool of buyers for them.
For estate tax purposes the IRS values is supposed ot value stuff at what it would bring in a quick sale. Minority ownership stakes and management contracts aren't going to be valued that high as since they don't allow the purchaser to exercise control over the asset. Add in the fact that a lot of real estate partnerships will have language in their governing documents that an interest can't be sold for a certain number of years or can only be sold to certain people and a quick sale price is going to be even lower since there's a smaller pool of potential buyers (banks usually don't car about this as the docs will have language that it doesn't apply to lenders on the project).
Add in the fact that when the valuations were made is going to have a huge effect as well. A good portion of Trump Sr's career was spent in a very volatile market such as when NYC just about went bankrupt in the 70s you couldn't give buildings away, by the late 1980s it was back in style but by the time Fred Trump died in 1999 everyone wanted dot com investments intead of bricks and mortar.
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Say Fred Trump and partners bought a building for $1 billion and put 10% down borrowing the other $900 million, say Fred gets 1/3rd of the profits for managing the deal. He's now got assets that secured $900 million in loans and since he's the developer, he may well be personally guaranteeing the loan. But if he dies, the IRS is going to look at it as he owns 1/3rd of a $1 Billion building and has $300 in assets. Add in the fact that that his agreement with his 10 partners says a partnership interest can't be sold outside the partnership. .The only people on earth who can legally buy Trump's 1/3rd are those 10 people, that knocks the value down signficantly from the original $300 Million since the pool of potential buyers is now miniscule.
A bank/lender is mainly going to care that assets generate cash flow to pay back the loan. A lot of Trump, Sr. (and any real estate investors) assets aren't going to be straight up ownership, it's going to be owning a portion of a property, long term leases, or holding a management contract that allows them to run the show and get a percentage of the profits that may not be the same as their ownership stake in the property. Lenders are going to value these higher due to the cash flow they throw off, they tend to value stuff more as a going concern, but these things are going to be hard to sell as there isn't a tremendous pool of buyers for them.
For estate tax purposes the IRS values is supposed ot value stuff at what it would bring in a quick sale. Minority ownership stakes and management contracts aren't going to be valued that high as since they don't allow the purchaser to exercise control over the asset. Add in the fact that a lot of real estate partnerships will have language in their governing documents that an interest can't be sold for a certain number of years or can only be sold to certain people and a quick sale price is going to be even lower since there's a smaller pool of potential buyers (banks usually don't car about this as the docs will have language that it doesn't apply to lenders on the project).
Add in the fact that when the valuations were made is going to have a huge effect as well. A good portion of Trump Sr's career was spent in a very volatile market such as when NYC just about went bankrupt in the 70s you couldn't give buildings away, by the late 1980s it was back in style but by the time Fred Trump died in 1999 everyone wanted dot com investments intead of bricks and mortar.
That was really well written. You must be in the business.
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Joined: Nov 2008
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Campfire Ranger
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Boys at lunch were talking about how years ago Trump's father managed to have assets valued at $200 million for the IRS estate taxes, but also at $900 million to back loans. I don't know anything about this issue. Anyone recall what was going on here? The girls you eat lunch with would be better off spending their time wondering about the latest Hollywood gossip. Sounds like that's about the depth of their daily wonderings. Unless we are really into digging into POTUS family history/business. In which case I would assume they were totally into Barry's parents and getting to the bottom of that morass? I'm going to go out on a limb and say they were not........ But of course there never really were any girls at lunch were there?
MAGA
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Campfire Tracker
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Say Fred Trump and partners bought a building for $1 billion and put 10% down borrowing the other $900 million, say Fred gets 1/3rd of the profits for managing the deal. He's now got assets that secured $900 million in loans and since he's the developer, he may well be personally guaranteeing the loan. But if he dies, the IRS is going to look at it as he owns 1/3rd of a $1 Billion building and has $300 in assets. Add in the fact that that his agreement with his 10 partners says a partnership interest can't be sold outside the partnership. .The only people on earth who can legally buy Trump's 1/3rd are those 10 people, that knocks the value down signficantly from the original $300 Million since the pool of potential buyers is now miniscule.
A bank/lender is mainly going to care that assets generate cash flow to pay back the loan. A lot of Trump, Sr. (and any real estate investors) assets aren't going to be straight up ownership, it's going to be owning a portion of a property, long term leases, or holding a management contract that allows them to run the show and get a percentage of the profits that may not be the same as their ownership stake in the property. Lenders are going to value these higher due to the cash flow they throw off, they tend to value stuff more as a going concern, but these things are going to be hard to sell as there isn't a tremendous pool of buyers for them.
For estate tax purposes the IRS values is supposed ot value stuff at what it would bring in a quick sale. Minority ownership stakes and management contracts aren't going to be valued that high as since they don't allow the purchaser to exercise control over the asset. Add in the fact that a lot of real estate partnerships will have language in their governing documents that an interest can't be sold for a certain number of years or can only be sold to certain people and a quick sale price is going to be even lower since there's a smaller pool of potential buyers (banks usually don't car about this as the docs will have language that it doesn't apply to lenders on the project).
Add in the fact that when the valuations were made is going to have a huge effect as well. A good portion of Trump Sr's career was spent in a very volatile market such as when NYC just about went bankrupt in the 70s you couldn't give buildings away, by the late 1980s it was back in style but by the time Fred Trump died in 1999 everyone wanted dot com investments intead of bricks and mortar.
That was really well written. You must be in the business. yeah probably wealthy too,
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Campfire 'Bwana
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Campfire 'Bwana
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Boys at lunch were talking about how years ago Trump's father managed to have assets valued at $200 million for the IRS estate taxes, but also at $900 million to back loans. I don't know anything about this issue. Anyone recall what was going on here? None of my business, or yours.
Give a man a fish and he eats for a day. Give a man a welfare check, a forty ounce malt liquor, a crack pipe, an Obama phone, free health insurance. and some Air Jordan's and he votes Democrat for a lifetime.
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Campfire Outfitter
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Boys at lunch were talking about how years ago Trump's father managed to have assets valued at $200 million for the IRS estate taxes, but also at $900 million to back loans. I don't know anything about this issue. Anyone recall what was going on here? You don't know anything about this issue because it's a non issue.
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