Burman Quoted in Newsweek Article on Trump’s Civil Fraud Penalty

March 26, 2024

Newsweek

Leonard Burman

Public Administration & International Affairs Department

Law

Taxation

United States

Newsweek

Leonard Burman

Trump was handed a $454 million fine in February for filing fraudulent financial statements which inflated the value of his properties for years. If he chooses to sell his assets to pay the civil fraud fine, he may face financial issues by accruing tax.

Len Burman, professor emeritus of public administration and international affairs, says borrowing money would be a better way to raise funds to pay the penalty.

“There would be capital gains tax for properties that have increased in value above their depreciated basis (purchase price plus cost of improvements minus tax depreciation),” he says.

“This is one reason he'd presumably prefer to borrow money using the properties as collateral. It's telling that he has trouble finding lenders willing to lend to him, but maybe not surprising given the issue in the legal case is his overstatement of property values. If he does sell, he would presumably try to sell the properties with the smallest gains, or even losses he can use to offset other gains, to minimize his capital gains tax,” says Burman.

Read more in the Newsweek article, “Donald Trump's Fire Sale of Assets Faces Major Roadblock.”