Trump’s Financial Situation Is Even Shakier Than We Knew
Trump’s tax returns reveal that he has far less liquidity than he’s presented—and it could explain a lot of his behavior. When Donald Trump left office in early 2021, he was apparently on much thinner financial ice than almost anyone knew.
That revelation, which three accounting experts confirmed upon reviewing Trump’s 2020 tax return, may help explain some of the financial and political moves the former president has made in the intervening years. Snowballing legal fees, along with other possible legal settlements and judgments, threaten to consume the cash pile he needs to bankroll his business activity, as well as fund a lavish lifestyle and maintain his image of excess—an emperor atop a golden toilet.
How big is that cash pile, exactly?
Accountants caution against reading too much into tax returns of high net worth individuals like Trump—especially ones in the real estate business—because those filings can be extraordinarily complex. That said, all three tax experts interviewed for this article concurred that Trump’s stash on hand at the end of 2020 does not appear to be quite as generous as the returns might make it seem.
While Trump often boasts of being a billionaire—which, in terms of assets, he is—two of the experts who reviewed his returns for this article said that as his presidency came to its tumultuous end, it appears Trump, depending on interest rates, may have had immediate access to anywhere between $30 million and $100 million, with that amount itself scattered across hundreds of entities.
That bottom line was reflected in new documents filed last week by New York Attorney General Letitia James in her $250 million fraud lawsuit against Trump, three of his adult children, and his businesses. Those documents show that Trump—a billionaire on paper—only had control over about $65 million in liquid assets as he prepared to depart the White House.
The cash flow discrepancy, according to three accounting experts who reviewed Trump’s 2020 tax returns, is significant, and can be chalked up to one simple fact: The vast majority of Trump’s ordinary income is reported as interest income and derived from pass-through entities. His tax returns are not intended to report if this income was actually distributed to him—they only indicate what income is attributed to him as an owner or investor.
That fact is central to James’ lawsuit, which argues that these funds may not actually equate to liquidity—and that when Trump applied for loans, he played up those “restricted funds” as his own money in order to help secure the loans. In reality, the suit says, a significant portion of what Trump called “his” cash was wholly controlled by another entity—the real estate behemoth Vornado—which Trump could not unilaterally access if he, or his businesses, needed to find some funds.
“Internal Trump Organization records acknowledge that cash residing in the Vornado Partnership Interests was not Mr. Trump’s to access at his whim,” the new filing reads.
The filing goes on to cite those internal records, which admit that “distributions are at the discretion of Vornado” and “at this point we do not have all of the data that goes into Vornado’s decision making, thus we are attributing no distribution for these properties.”
Citing Trump Organization financial statements, James points out that of the $92.7 million that Trump held in liquid assets in 2020, $28.25 million of that amount was tied up in “partnership entities Mr. Trump did not control as Mr. Trump’s own liquidity.” In some years, she said, “these restricted funds accounted for almost one-third of all the cash reported by Mr. Trump.”
Mark S. Gottlieb, a forensic accountant and tax law expert in Manhattan, told The Daily Beast that if the attorney general’s premise is correct and Trump does not have access to portions of the 2020 income attributed and taxed to him, those amounts are tantamount to “phantom income.”