Donald Trump received a middle class tax credit on a Park Avenue condo that his campaign acknowledges he never actually lived in, even though only primary residences were eligible for the New York property tax credit, TPM has learned.

After TPM brought the Park Avenue tax credit to the attention of the Trump campaign, it admitted Friday that Trump should never have received the tax break on the Park Avenue condo but blamed it on a mistake by the city (more on what the city thinks of that later).

TPM came across the problematic tax credit in the course of examining Trump’s use of the tax credit on another property, his penthouse in Trump Tower in recent years. The city had ruled the penthouse was enrolled to get the tax credit by mistake, but a closer examination suggests mistake or not, Trump would have had to meet the state’s income requirements to qualify for the credit: taxable income of no more than $500,000 a year.

The upshot is that there is reason to suspect that Trump suffered additional losses sometime after 1995 that he used to drive down his taxable income and ultimately his income tax burden.

Taken together with the partial Trump tax returns published by the Times, the story of the Trump property tax credits casts new light on Trump’s wealth and how it came to be that a billionaire real estate developer was scrounging a roughly $300 tax credit intended for middle class New Yorkers who made $500,000 a year or less.

The tax credit story first surfaced earlier this year in Crain’s New York Business, and received some national attention because of what it suggested about Trump’s wealth. If Trump was eligible for a tax credit that included a requirement that the taxpayer make no more than $500,000 a year, how much could Trump really be worth? But denials from the Trump campaign and a confused response from the city of New York left the story muddled.

Then came the New York Times’ revelation last week that Trump had declared business losses of nearly a billion dollars on his 1995 tax returns. The business losses, as the New York Times reported, could have been set off against Trump income in future years and would have allowed Trump to avoid paying income taxes for more than a decade. Suddenly it seemed like the huge losses Trump’s business failures had generated in the early ’90s might explain how he managed to have an income low enough to qualify for middle class tax breaks years later. And it may have offered a window into how Trump would have been eligible for the tax credit at Trump Tower even if it had been administered by error.

That’s what TPM set out to pin down. And the short answer, according to tax experts, is that, yes, Trump’s losses as reported on that 1995 return could very well help explain how he managed to report income low enough to qualify for the New York tax credits into the 2010s. And his receipt of the tax credit as recently as last year, after those early ’90s losses would have expired, suggests Trump has continued to drive down his taxable income to miniscule levels for a man of his wealth. But in addition, Trump was for some five years receiving the tax credit on a property that was not his primary residence, which would have been in violation of the rules governing the credit.

Trump Park Avenue Condo





Trump Park Avenue, at 502 Park Avenue, two blocks from Central Park, is a signature Trump property, a 32-story pre-war classic originally built as a hotel. Trump acquired it in the early 2000s and converted it into condominiums. One of the units, 16B, was owned by a Trump company and received the New York STAR tax credit from 2009 to 2014, according to property tax records reviewed by TPM and subsequently confirmed by the city.

What initially jumped out as suspicious was that unit 16B is small, tiny even, to serve as the primary residence for the high-flying Trump. It has only one bedroom, one and a half baths, and takes up just over 1,400 square feet. Could the gold-leaf Trump really be living in a one bedroom, while all the magazine spreads focus on his fabulous digs in Trump Tower over on Fifth Avenue?

Not a chance.

When asked Thursday whether Trump resided at Trump Park Avenue, Trump spokesperson Hope Hicks told TPM in an e-mail, “Mr. Trump does not live at 502 Park and never has.”

A spokesperson for the New York City Finance Department expressed surprise when TPM told her that Trump’s campaign openly said that Trump never lived at the property.

According to both New York City’s Department of Finance and New York State’s Department of Taxation and Finance, the residency requirement has always been a part of the STAR program. You can see it on an STAR application here. A New York “Summary of 1997 Real Property Tax Legislation” declared that “anyone who misrepresents his or her primary residence, age, or income on a STAR application may be subject to to a $100 penalty, may be prohibited from receiving the STAR exemption for five years, may have to return up to three years of tax savings and may be subject to criminal prosecution.”

The city spokesperson told TPM that it’s not really that easy to just have a property show up getting the STAR credit out of the blue. In addition, there are facts peculiar to Trump’s case which would make it even less likely for the credit to be awarded without Trump having sought it, according to the city.

Trump had received the STAR credit on his 5th Avenue penthouse up until 2009, according to the city and tax records reviewed by TPM. In order to transfer that tax break from one property to another, Trump would have had to have filled out a form declaring 502 Park Avenue as his primary residence, the city spokesperson told TPM.

“Could it have been a mistake?” TPM asked.

“It wasn’t a mistake,” the spokesperson said Thursday night, before the Trump campaign said the tax credit mistake was the city’s fault. “He would have had to fill out a form to receive the exemption.” The city declined to provide TPM with the completed form because it is a non-public tax document.

For its part the Trump campaign is blaming the city for having awarded Trump the tax credit on the Park Avenue property he never lived in.

“This Condo Unit was never eligible for any STAR exemption because pursuant to State Law, an apartment owned by a corporation or LLC is not eligible for such a credit. The Park Avenue apartment is owned by Trump Park Avenue LLC. and clearly not eligible on its face,” Hicks wrote TPM in an email Friday.

“The fact that the apartment is owned by a corporation is a matter of public record, and the City of New York was on notice that this apartment was not eligible and should not have been given an exemption,” Hicks wrote.

“Therefore this is a clear error of the City. It is my understanding they are in the process of making the correction,” she concluded.

TPM is awaiting a response from the city to Hicks’ claim that the city is to blame.

A spokesman for New York State Department of Taxation and Finance said the city would have made a determination if the LLC was eligible at the time.

If it wasn’t a mistake, Trump would have violated the rules of the STAR credit or the School Tax Assessment Relief program,which was passed into law in 1997 to help residents reduce their local property taxes at their primary residences.

Trump Tower (725 Fifth Avenue)

Trump Tower has been the gold-plated, glittering embodiment of Donald Trump. His 58-story skyscraper sits along New York’s most prominent fashion corridor. The lobby screams Trump luxe: marble and reflective gold-plating. Photographs of Trump’s own penthouse shows more opulence, with paintings of cherubs, pillars and yes, more gold accents.

The disagreement over whether Trump should have ever received a tax break on the Park Avenue condo is similar to the dust up the Trump campaign had earlier this year over the STAR credit on his Trump Tower penthouse.

In that case, the focus of the story was on the stunning possibility that Trump–a mogul known as much for bragging about his wealth as he is for his actual fortune–could be pulling in a mere half a million dollars a year or less and thus qualified for a penny ante tax credit worth only about $300 a year. Was this at long last a window into the actual size of Trump’s fortune?

Crain’s New York Business reported in March and June that Trump was getting the STAR credit as recently as this year. Trump’s campaign insisted that it was a mistake, and the city said that it administered the credit to Trump Tower in error and that Trump never applied to get the credit after a change in the law required recipients to register for the credit through the state in 2014.

How that happened remains quite the mystery, which a lot of people have tried to figure out including the New York Daily News’s editorial board, which also conducted an extensive review of Trump’s STAR credits over the years.

But even if it was a mistake, it could still offer us insight into Trump’s income.

What does this all tell us about Trump’s income?

While there is no way of knowing for sure what Trump’s adjusted gross income was after 1995 without his actual tax returns, the rules of the STAR program are pretty clear, as we’ll explain below. And the fact that Trump continued to be deemed income eligible for the program as late as 2015 suggests he was still reporting dramatically lower income for someone of his wealth – and potentially paying what would be for him negligible income taxes.

“The state has a good system of matching the income tax returns to the STAR credits. Those property taxes that you dug out, they are showing the STAR credit so he must have been reporting under $500,000 of income in the years that would have connected to those particular property taxes,” said Robert Nassau, a professor of practice at Syracuse University’s Law School and the director of the Low Income Taxpayer Clinic.

If the city enrolled Trump in the STAR program by mistake, the state still would have had to verify Trump’s income beginning in 2011 to ensure he qualified for the program. That was the law.

Beginning in the 2011- 2012 school year, in order to qualify for Basic STAR, which is what the Park Avenue condo had been receiving, residents had to report adjusted gross income (“minus the ‘taxable amount’ of total distributions from individual retirement accounts or individual retirement annuities “) of no more than $500,000. The law stated that “for a parcel to be eligible, for the Basic STAR exemption, it’s affiliated income, must be no greater than $500,000.” The state looked at an individual’s adjusted gross income from two years prior to determine their eligibility.

In order to understand, how income was verified by the state, TPM reached out to James Gazzale, a spokesman for New York State Department of Taxation and Finance.

Here’s how he described the process.

“The STAR property tax exemption is administered at the local level. In the case of NYC, where Mr. Trump lives, property tax administrators send the New York State Department of Taxation and Finance a list of Basic and Enhanced STAR recipients each year; the department reviews the income for each recipient based on tax return information, and provides the City with a list of income ineligible property owners for the City’s action,” Gazzale said.

That means that even if both properties were registered in error by the city like the Trump campaign claims, to receive the credit, the state would have still been checking the owner’s income eligibility starting in 2011.

In order for Trump Park Avenue LLC to have received the STAR tax credit in the 2011-2012 school year (which records show it did even as the Trump camp disputes its eligibility), Trump would have had to have filed an adjusted gross income on his tax return in 2009 of $500,000 or less. In order to receive the STAR tax credit in the 2012-2013 school year (which records show, again, it did), Trump would have had to have filed an adjusted gross income on his taxes in 2010 of $500,000 or less.

The same thing would be true in 2014 and 2015 even though the city said that they enrolled Trump on accident for the program. Here’s why those later years are so important.

From the New York Times publishing of Trump’s 1995 tax return, we know that Trump reported more than $900 million in losses. Because of the law at that time, it was possible that losses Trump reported in 1995 could have been written off for 15 years after that. That means that Trump could have been reporting those losses into the mid-2000s that would have made him eligible for a middle class tax deduction. But those losses would have run out around 2010. In order to still be meeting the $500,000 threshold and still be eligible for the STAR credit, it is probable Trump would have had to have filed new losses after 1995.

“It is perfectly possible, that he could have still had NOLs [Net Operating Losses] and that would explain it,” said Ed Kleinbard, a business and law professor at the University of Southern California’s Law School. Kleinbard noted it is not that unusual for a real estate magnate to have losses year after year.

There is no way, of course, of conclusively deducing exactly how much income Trump was reporting when he was getting these credits or if he continued to report losses on his tax returns. But, the state of New York told TPM that it does verify the income eligibility of each applicant that the city puts on the STAR roster.

Trump’s could release his actual tax returns to show us, which so far don’t seem to be coming ahead of the November election.