Trump Chicago Skyscraper Loan Under Scrutiny
Donald Trump’s 92-story skyscraper in Chicago is the biggest thing he’s ever built. It’s also the last. And now that Manhattan District Attorney Cyrus Vance Jr. has Trump’s tax returns and supporting documents, the forgiveness by lender Fortress Investment Management of $150 million in loan principal and interest on that property is being investigated for possible tax fraud.
Investigators for Vance and New York Attorney General Letitia James have been poring over Trump’s financials, looking into accusations by former Trump “fixer” Michael Cohen that the former president routinely doctored loan and tax documents to suit his purposes.
In Chicago, Trump’s vision for a grand condo, hotel, restaurant and retail building was plagued by financial problems almost from the day it opened during the financial crisis in 2009. Trump was unable to sell many of the multi-million-dollar residences and much of the retail space has never been occupied. The building became another disappointment in Trump’s bankruptcy-filled portfolio, but he also turned it into a mechanism for exploiting the tax code.
Somehow Trump managed to strong-arm several of the lenders for the project into renegotiating loan terms and, ultimately, forgiving massive amounts of the debt while maintaining ownership. Since 2010, lenders have forgiven about $287 million in debt that he failed to repay, according to tax records obtained by the New York Times.
What piqued the interest of New York investigators is the question of whether Trump and his companies declared that forgiven debt as income and paid tax on it, as required by IRS rules. James has characterized the Fortress debt forgiveness as a “significant” aspect of her investigation.