Donald Trump's presidential campaign paid off in a big way for younger son Eric: He got a great deal on a huge apartment. ProPublica reports that Eric Trump is combining three luxury high-rise apartments, including one he got from his dad for "a throwaway price," into one potentially lucrative penthouse.
In spring 2016, Eric bought two apartments at Trump Parc East from his father at $350,000, about half their market value. In the summer, he filed to combine one of those apartments with two others he already owned to create a 2,400-square-foot penthouse overlooking Central Park. The total cost of the apartments and renovations: $3.3 million. The potential market value of the space, considering the building's most recent price per foot: $10 million.
Apartments sold for such fire-sale prices are usually taxed as gifts. But Donald Trump may not have been assessed that charge because of loopholes available to real-estate developers.
- Celebrity deaths 2018: All the stars we lost too soon 44 Pictures
- 10 finalists for TIME Person of the Year 2018 10 Pictures
David Herzig, a tax professor at Valparaiso University Law School, because the apartments could be combined to create a lucrative property, they should have been priced much higher. "If this is a key component that you would need to combine them together to make a penthouse, to get the requisite number of rooms, that actually means that this property should have been sold at a premium, not a discount," he said.
If he had given the apartment to Eric for nothing, Trump Sr. would have been charged up to 40 percent tax on its market price. But the $350,000 sale could have been arranged to look like a “fair market sale” and not a gift, ProPublica says. The apartment's real market value was probably closer to $2 million, the price of a similarly sized apartment in Trump Parc East that Donald Trump sold to his other son, Donald Jr., in 2008.
Donald Trump paid transfer taxes on the property, which aren't levied on gifts. But he also didn't check the box indicating the sale was between relatives. Without the president's tax returns, the details remain murky.
Representatives from the Trump Organization haven't commented.