Former President Trump faces potential $100 million tax bill over improper Chicago tower tax breaks

According to an investigation by The New York Times and ProPublica, former President Donald J. Trump is in the midst of a tax controversy involving his Chicago tower. The Internal Revenue Service (I.R.S.) uncovered that Mr. Trump utilized a questionable accounting tactic to claim improper tax breaks, potentially leading to a tax bill of over $100 million.

The Troubled Chicago Tower

The 92-story skyscraper, situated along the Chicago River, represents Mr. Trump's final major construction endeavor. Despite being the tallest structure in the area, the project encountered significant financial turmoil due to cost overruns and the unfortunate timing of its completion during the Great Recession. As a result, it suffered substantial financial losses.

The Dubious Tax Benefits

When attempting to leverage tax benefits from these losses, the I.R.S. contends that Mr. Trump took it too far. It is alleged that he effectively wrote off the same losses twice, first on his 2008 tax return. At that time, he claimed that his investment in the condo-hotel tower qualified as "worthless" under the tax code due to the lagging sales and substantial debt, leading to reported losses of up to $651 million for the year.

Losing the ongoing audit battle over the tax claim could have severe financial implications for Mr. Trump, resulting in a hefty tax bill exceeding $100 million.