this post was submitted on 12 Oct 2023
66 points (86.7% liked)
Explain Like I'm Five
13882 readers
223 users here now
Simplifying Complexity, One Answer at a Time!
Rules
- Be respectful and inclusive.
- No harassment, hate speech, or trolling.
- Engage in constructive discussions.
- Share relevant content.
- Follow guidelines and moderators' instructions.
- Use appropriate language and tone.
- Report violations.
- Foster a continuous learning environment.
founded 1 year ago
MODERATORS
you are viewing a single comment's thread
view the rest of the comments
view the rest of the comments
If you have a business asset, you can take out loans using that asset as collateral, and then use the loaned money to go do other business things. If you exaggerate the value of the asset, you can take out bigger loans.
(Even if you repay the loans later, you've taken advantage of the banks who made the loans, because they only have so much money to lend out to businesses.)
If you own real-estate, you owe property tax on it. If you understate the value of your real-estate, you can (for a while) get away with paying less in taxes.
Mr. Trump and his companies did both of these things. They exaggerated the value of their assets when it came time to get loans, and they understated the value of those same assets when it came time to pay taxes on them.
OMG ๐คฆ Thank you for explaining this. Now I get why he keeps saying that no banks were harmed. And now it makes sense why they believe he owes so much in taxes.
Okay, I'm tracking like a VCR
Now you just playin'
which is true only until the business he needed the borrowed money for goes sideways, he doesn't have the money to pay back and the bank finds that the collateral doesn't have the value he claimed when borrowing the money.
edit:, oh f..k, i am replying into a year old thread, well... ๐คท
Hah ๐ no worries friend. So much of this bizarro-world shit show has happened in that time.