Donald Trump's Tax Return - A Case Study for Divorce Attorneys
Hi, welcome to ValuationPodcast.com, a podcast and video series about all things related to business and valuation. My name's Melissa Gragg, and I provide online valuation services for mediation and litigation based in St. Louis, Missouri.
Today we will discuss Donald Trump's tax return, and it's really a case study for divorce attorneys and what to look at in a personal tax return with Jason Soman. He's a valuation expert in Boca Raton, Florida. He owns his own firm Accounting and valuation LLC, and he's specializing in business valuation and forensic accounting in the context of divorce. Welcome, Jason. How are you? -Overview of the podcast -Understanding depreciation recapture
Why would someone have multiple LLCs listed on their tax return?
Why do we care about the refund in a divorce?
Trust information from a divorce valuation standpoint
What is the “schedule C” on a tax return?
Overview of schedule C - Melania Trump
The "carryforward" section on schedule C - why it is important for divorce attorneys?
What is the purpose of schedule E on a tax return?
About Jason Soman
Melissa Gragg CVA, MAFF, CDFA
Expert testimony for financial and valuation issues
Bridge Valuation Partners, LLC
melissa@bridgevaluation.com
http://www.BridgeValuation.com
http://www.ValuationPodcast.com
http://www.MediatorPodcast.com
https://www.valuationmediation.com
Cell: (314) 541-8163
Jason Soman, CPA*/ABV, ASA, CFE, CDFA®
Accounting & Valuation LLC
Boca Raton, Florida (561) 419-6111
jason@accountingvaluation.com
www.DivorceForensicAccountant.com
See transcript below:
Melissa (00:00:00):
Hi, welcome to valuation podcast.com, a podcast and video series about all things related to business and valuation. My name's Melissa Gragg, and I provide online valuation services for mediation and litigation based in St. Louis, Missouri. Today we will discuss Donald Trump's tax return, and it's really a case study for divorce attorneys and what to look at in a personal tax return with Jason Soman. He's evaluation expert in Boca Raton, Florida. He owns his own firm Accounting and valuation L L C, and he's specializing in business valuation and forensic accounting in the context of divorce. Welcome, Jason. How are you? Thank
Jason (00:00:41):
You, Melissa, for having me. It's a pleasure to be back on.
Melissa (00:00:44):
So we've been talking this topic up on LinkedIn because I actually thought it was interesting. So I did wanna kind of caveat this with, this is not political. We do not plan on having political discussions about the veracity of, of anything happening. It really is just kind of our maybe nerdiness coming out in that <laugh>, we love anybody's tax return. And what is for this specific though exercise our podcast, we're really saying, okay, look at this tr look at Donald Trump's tax return. But look at it from the context of what does any tax return tell us. Like what does it tell us about the couple, what does it tell us about income and expenses? But then taking it a a little deeper, yes, we're interested in the tax return, but realistically what does it, how does it affect a divorce and what should attorneys look for? So, Jason, tell us a little bit more about like, why is Trump's tax return? Why is this tax return I, you know, interesting and or why did we decide to have this be the focus?
Jason (00:01:56):
Absolutely. So for family law attorneys, I think the ability to size up a tax return is a key skill It makes working with forensic accountants a lot easier. It also, you know, knowledge is power. So the earlier we know about issues, the earlier we know about assets, income, you know, little things, right? It's these details that really make a, that could really have an impact on a divorce case. You know, the tax return's a great starting point, and of course it's gonna leave us with a lot of more questions than answers. But, you know, sometimes the whole process of forensic accounting, the way that it works is, is we ask a lot of questions, we find answers, and then we can't find answers to things, and then we kind of do that process over again. And you know, the, what's cool about this tax return is that, you know, the Trumps are very wealthy.
Jason (00:02:44):
You know, we we know that and we, I wrote previous articles about tax returns, and last time I was on the podcast we spoke about tax returns. But the problem is, is that, you know, this is a top five tax return that I've seen in my career in terms of, you know, the, the complexity of the assets, you know, the number of assets, the amount of income. So this is a top five tax return that I've seen in my career. But I could tell you that the other four were not made public and I would never be able to show or talk about them with anyone. And fortunately the topic that we've been talking about, you know, even before we had these tax returns it kind of brings life to it, you know, people, whether you like them or love 'em or hate 'em I think that Trump has interesting tax returns and I think that there's information in there that we could show family lawyers how to kind of size of the case and use a tax return to do it. And what's cool about these tax returns, they have a little bit of everything that we've talked about. And it, it, what's cool also is it's at a high level, right? Like there's a lot of them. And, and the issues that we talk about, you know, income versus cash flow are really magnified when you start talking about millions and millions of dollars.
Melissa (00:03:59):
And I think that what people need to understand is in this process, you know, so we have talked about personal tax returns before, but it's because it's such an, like, it's almost like the starting point. And I think even in the podcast, you know, I was like, yeah, you get business tax returns and then you get personal tax returns. And I was like, which one do you look at first? And you're like, personal? And I was like, what are you kidding me? But it's interesting because we can't just put somebody else's tax return out there and start talking about it, like, there are uniquenesses that we sent, or we're gonna make it up. You know, like we can make up numbers and we can show them what they mean, but to see it actually in real life, to see the nuances, to see how something could appear to be this red and it is really green, or shades of red and green, you know?
Melissa (00:04:47):
So to see this kind of play out in real life, now our specific focus is on divorce only because that's where we primarily look at tax returns and the personal tax return could be a starting point, and it is the starting point for an attorney. And so we're trying to identify like maybe where you should know that there's an issue. Even if you don't know what the issue is, you've at least been like, oh, wait, I have questions. What could be, you know, the answer to these questions. So I think if we kind of start getting onto it. So let's give an, an overview, if you will, of what we're gonna discuss, because this is just, you know, the front page of what a 10 40 looks like, but, and this is, this is Donald Trump's tax returns. So these are the numbers and we're gonna drill down deeper, but in general, like give us a roadmap. What are we gonna talk about? What, what tips should divorce attorneys be prepared to be paying attention to? And, and then we'll come and kind of go through the tax return.
Jason (00:05:51):
Absolutely. And I think one of the, one of the reasons why I'm kind of passionate for talking about tax returns with divorce attorneys is because I remember when I first started in this business and I was learning about how to read tax returns, you know, we're not tax people, right? Like the, the tax partners at whatever firm that prepared this tax return have way more thorough and complex tax knowledge than I do. This document that w that you're summarizing on the screen right here is a 350 page document. There's a ton of information in tax returns, and it took, I'd say years for me to really understand and be able to pick out the important numbers and the important facts from the tax return. So when we're looking here at the first page of the tax return, what this does is it kind of gives you a high level summary of, of what happened during that tax year.
Jason (00:06:43):
Then the numbers that are on the first page, what we could see is, is that, you know, there's, there's backup for all these numbers. For example, you know, there's 10 million, $10.6 million of, of interest income. So, you know, you'll see that and you'll say, oh, where do I find out where the 10.6 million in interest income comes from? We're gonna show you that on this podcast. And it's also, you know, you should know that if you see any number in the beginning of the tax return, most likely you should be able to look back in the tax return and kind of find out where that number came from. So, you know, looking at the first page of the tax return, I see a, a negative 4.7 million in income. So a and that's because of the fact that there's this other income of fif negative 15.8 million. So before that, there was, call it 11 million of income before this negative 15 million hit.
Jason (00:07:44):
And, and I think it's important to realize, cuz you know, a lot of people will talk in the news and they'll say, oh, I mean, it doesn't matter what side of the aisle or what you think about the tax returns. I think that the moral, the story here that, and that will get into is that no one really knows what, what Donald Trump is putting in his pocket. You know, whether you think, oh, he's you know, he really doesn't make any money because, you know, he has a negative 4.8 million in income in his tax return. You know, I don't think that's true. And you know, I don't know if he's got all this money that he says he does, you know, in the interesting comment these other places because we don't actually know what he put in his pocket. So I think that these are, it's a very important concept in determining income and for divorce purposes, is that what someone's income is as report on their tax return does not necessarily equal what they put in their pocket.
Jason (00:08:38):
And I think real estate investors, developers, people who are involved in real estate, I think the disparity between income and cash flow is huge. Sure. And that's because there's, you know, there's depreciation, which is non cash charges. There's, you know, so you could get income to be negative. And also, you know, what people do is they have appreciating property and then they refinance that property and they take out cash, you know, from the increased level of debt and that that'll never hit, hit the personal tax return. So for all we know, you know, we don't know whether his income is, you know, income for support income alimony. We don't know whether that number is negative 4.8 million or 20 million or 50 million. You know, we have really no way to tell how much money you put in his pocket. And I look forward to taking you guys through that and showing you guys why
Melissa (00:09:33):
And income and cash flow I think become really important. So let's, let's go back just one step in a divorce, we're going to look at, you know, an expert could come in and say, Hey, this is what each spouse makes, right? This is your income, this is your income available to pay alimony or maintenance. This is how we calculate it. And in some of these situations, if you see a, a large income number and a large negative number, which is basically a loss, you know, a lot of times, and, and in this particular example, we are looking at a tremendous amount of real estate is the underlying asset, right? That's what's owned in these different entities. But when you deal with a divorce of a real estate developer or anybody in the real estate industry, they're gonna be like, oh, you don't understand depreciation, recapture, and everything's worth nothing. And oh my gosh. You know, so talk a little bit about like why anybody even cares about that. I know this is a little bit, it, it's kind of in the same threshold of like, how could it be negative and yet still have something come in? What do, do we care about depreciation, recapture? What does it mean in real estate?
Jason (00:10:46):
Absolutely. So, you know, I I think it's also important to understand that you know, real estate investors have a really great deal from the tax code perspective. I mean, you can buy a property for a hundred thousand dollars, it appreciates to a million dollars. You could sell that property, make $900,000 gain, and then put it into other different properties. And real estate investors, yes, you eventually, when you sell all those properties a hundred years from now, there may be a depreciation recapture, right? Because you still have that original cost basis. But what real estate investors do is they kind of kick the can down the road for a long time, right? And then when it property is appreciating, they're able to refinance it because the bank has a hard asset such as real estate, and they're able to take that money out as debt.
Jason (00:11:41):
And as long as the properties aren't over leveraged or the property values keep going up you know, they're able to kind of consistently pull out cash. And it's never gonna hit your, your income. And you know, I do think that if, let's say Donald Trump and Melania were getting divorced and Donald Donald came in saying, I make negative 4.8 million, you know, no one's gonna believe that when he is flying around a jet and has a golden apartment or, or whatever, you know lives in Trump Tower. So, you know, I think there's a big disparity there. But, you know, that's, that's part of why we exist as for as divorced forensic accountants, because, you know, clients rely on us to tell 'em, well, what's the real number? How much money is does he really have for support?
Melissa (00:12:26):
And the, and the biggest, I mean the biggest concept you're gonna have throughout this entire podcast is that income is not the same as cash flow. And so when we're looking at an income tax return, that is the taxable income calculation that almost has nothing, you know, they, they, they're, they're related obviously, but it almost has nothing to do with cash flow. Now, with the issue with the depreciation or capture just to kind of close the loop, how that means to income is that, is that a, an owner of real estate if they went to go sell that property, so in a divorce we're getting divorced, we need to know what the property value is today in, in the person's mind that owns the real estate, they're hypothetically selling that property. Like, what would I get if I sold that property? And they have this idea of the depreciation we recapture in the income that they're going to generate off the sale. So in some capacity it's a hypothetical transaction, you know, like that you're thinking about, but it has implications to income and cash flow. And really the attorney needs to understand that there is a difference. Right?
Jason (00:13:38):
Absolutely. And I also think that, you know, I think in the beginning of the case, this also helps you identify assets, right? I think one of the biggest concerns of divorce accountants and divorce attorneys is, is like, we don't wanna miss anything, right? Especially with a couple that own so much, right? Like there's, and as we'll get into, there's dozens and if not hundreds of LLCs reported in this tax return. So, you know what, if you miss an llc, you know, you, that's the last thing anyone wants. Cuz you know, knowing these people, this LLC that they miss could own a property, could own Trump tower, right? So you know, just, we can't let anything fall through the cracks. And I think that having a tax return is a great source to to, to start packing that snowball, right? Like you, you're, when you get a case, you're always trying to build what's my potential universe, right? Like, what is the extent of all these business interests? What is the extent of all these bank accounts? And then the, the next question is, is, well what do I need to get in order to figure this out and to really mm-hmm. <Affirmative> figure out what the estate is worth and, and what the income is.
Melissa (00:14:48):
Well, and I think that the another issue when we're just looking at different entities, and you'll see this more often when you have an operating business that owns a piece of real estate, and you'll see it when even real estate investors are investing in projects or different entities. Like why or how would somebody have a hundred different LLCs? And why would they have the operating entity in a different LLC as the actual, like, you know, I'm an accounting firm and I have a building, but I have them in two different entities. Like why? Cuz that's what we see a lot of mm-hmm. <Affirmative> in divorce. Why would that exist?
Jason (00:15:31):
Absolutely. And I, and I think that for the most part, this has to do with liability. It has to do with potentially saving money on taxes. There's a whole host of reasons, but you bring up a good point, Melissa, because I'd say one of the most difficult parts of being a forensic accountant and doing valuations where there's dozens of entities, right? It's just figuring out the ownership. Because what happens is, is that one LLC owns another LLC that owns another llc and you know, there, there might be various trees in order to get there, right? And there may be different route to the same building, right? Like for example, truck may own Trump Tower through, you know, a chain of LLCs that go one direction and then another chain of LLCs that go in another direction. So one of my old bosses used to always make an analogy to the Russian nesting dolls.
Jason (00:16:24):
It's kind of, once you pull one out, another one comes in, and then you gotta pull one on another one out. And sometimes there's, you know, one investment, call it one deal, one group of companies could, it could be dozens of LLCs for one project, one company, you know, maybe they have certain investors that are foreign investors. Maybe they'll keep that in separate llc, you know, maybe there's a management company that deals with, you know running the property or something of that nature. Yeah. Then there's also, you know, sometimes they, they break things out because there's a general partner. Maybe the general partner will get certain thresholds if there's certain returns that are being met. So, I mean, the level of complexity that we could get on a case like this if we were to have a, a case come in with tax returns looking like the Trump's tax returns, you know, it could be a very complex case, it could be a lot of work. And I'm sure the attorneys that are listening right now will, will see that once we start getting into some of the detail behind the numbers.
Melissa (00:17:27):
Yeah. We've given a pretty good, we'll talk more about the businesses as we get into those. I think one of the things that you have also been talking about and posting about and, and, you know, we've been, we've been trying to have this discussion over time is about the refund. And so what, what do we care, you know, this kind of shows a portion of the tax return, the second page that has the refund. But why do we, I mean, do we care about this? Like, I would assume that if we get the refund that you know, that like some people might assume that the IRS is gonna cut two checks cuz they know that you're getting divorced. Mm-Hmm. <Affirmative>, and that would be unreasonable to believe. So, like, why do we care about a refund in a divorce?
Jason (00:18:13):
Absolutely. So I mean, this co this all comes back to the concept of when people are getting divorced, it all sometimes seems that their income situation just tends to, to go down, their assets become less valuable. And, you know, you start seeing people try to play games. So, you know, something that some people may not be aware of is that at the end of the year when you file your taxes, you have the decision whether you want to get the full refund back or would you rather apply that refund to future years. So if you look at the Trump's tax returns, you know, he overpaid his taxes by 13.4 million, so that should be the full refund. But then again, you'll see outline 35 A, he only took 5.4 million as a refund. So that means that he took 8 million to be applied to future taxes.
Jason (00:19:04):
And the reason why that's an issue is because, you know, the definition of an asset is that it's going to, you know, provide some future benefit or extinguish some future liability. So the $8 million that they left with the government, that's an asset that we need to account for in determining the value of the marital estate. Because let's say that the filing date in this case was 12 31 20 20, you know, it's very possible that that 8 million, you know, let's say a divorce is over by 2021 that, that $8 million that Trump would benefit from that because he's gonna save $8 million next year on taxes or, you know, he could take that $8 million and keep rolling it forward. And you would be surprised at how often someone getting divorced thinks that they'll, oh, I'm not gonna take my refund now, I'll wait till the divorce is over. But you know, this is a quick way that any divorce attorney, any accountant can, could say, Hey, you know, there's an 8 million asset here, let's get it on the, get it on the chart, get in our, on our spreadsheet, and let's put it on our radar.
Jason (00:20:09):
And I think that's a lot of the moral of the story as we start going through these tax returns is like we're building our radar. We're trying to figure out every single asset that's out there, every piece of income that's out there. And we're constantly, you know, I I like to use the analogy like A G P S, right? Like we, we keep going, we keep going, and then we, you know, sometimes we have to recalculate our route based on new information mm-hmm. <Affirmative> so great place to start and start building that universe.
Melissa (00:20:38):
And this, this becomes important because if you, you know, like if you go to court to get divorced and you go to court in November 15th, right? And you think that you're going to court and you think that that day you're gonna be divorced. But the reality is the judge has to kind of think about some things and maybe they'll come back 30 days later, maybe they'll come back 60 days later, and now we're in January, right? So if we get divorced by December 31st, we can file separate, we can file married. If we're divorced by December 31st the next year, we don't get that option. You know? So I think it, it becomes important because if that following year you are not filing together, then that person has that $8 million already in the bank ready to file their own taxes and you don't get the benefit of it if you have taxes that are due.
Melissa (00:21:30):
So it does become kind of a, a hidden, I feel like issue sometimes that people can easily not discuss. I've had people hold their tax refunds, you know, and not deposit them. So you might only know that they were due from the tax return, things like that. So I think there are different ways that we can figure it out, but you're still going multiple levels deeper into a situation that's not necessary. Right. So one of the things in looking at the, that I thought was interesting. If you look at line 12, you have the K one from Mar-a-Lago club and it says it has a number next to it of 1 69, and then you have the next line or the following lines, you have other entities like Hudson Waterfront Association that has millions of dollars. What does this even mean? Like what do those dollars even mean? It's just saying from the K one, like, is that, like, was that cash? Was that money? Like what if I'm, if I'm the wife, like what do I get out of that?
Jason (00:22:41):
Absolutely. So I think first and foremost, this identifies that there's certain assets out there. And since we're looking at Schedule B, this means that, you know, Hudson Waterfront received millions of dollars in interest income. You know, I don't un I don't know about Hudson Waterfront, but you know, I don't know what types of assets they hold, but I'd imagine since we're looking at millions of dollars of interest income, maybe they hold loans receivable. So, you know, something that's Schedule B kind of could help you figure out is like, you know, what type of assets are we holding, right? Because it, a big number of interest income indicates that it owns some type of debt. I don't know because we don't have all the information, all the tax returns, all the balance sheets, p and ls for these Hudson Waterfront entities. So what it means really is that whoever was preparing the tax return, they received their K one from the parties and they essentially put in what amount of income was allocated to them.
Jason (00:23:39):
But I think as forensic accountants and divorce attorneys will want to see the actual K one, which is, is typically not included in the tax return itself because that will give information such as what percentage ownership do they have, is there some type of profit sharing arrangement where maybe they, you know, only get profits but they don't have a capital interest. It'll tell us maybe on the K one, maybe Hudson Waterfront Associates one owns Hudson Waterfront Associates two and that owns something else. So you may be able to see the layering of ownership by looking at some of the schedules in the back of the K one. But I think that first and foremost, this is very inconclusive in terms of how much money the parties are actually putting in their pocket, because we would need to actually see how much of that 3.3 million looking at line 15, did the Trumps actually receive mm-hmm. <Affirmative>.
Jason (00:24:34):
So I think, you know, understanding Schedule B is gonna help us identify maybe what the assets are, you know, what do we need to go after and maybe give some type of clues as to what, what what is held by the entities themselves. I think something else the Schedule B will report is bank account interest, right? Like bank account interest is cash flow received. So when you're looking at Schedule B in terms of what the income is, you kind of have to look at, well, what's from a K one, what's from an LLC partnership, S corp, and then what is actually cash received? So something that I'll, that's not on the screen right now, but I was looking at that I found very interesting is that when you look at Trump's Schedule B, there's about $400,000 in interest from Capital One.
Jason (00:25:26):
And we all know during 2020 interest rates were extremely low, right? So let's just envision for a second that that $400,000 of interest income was at 1%. What would that mean? That means that they have $40 million in Capital One or, you know, just as a back of the napkin type of what order of magnitude are we dealing with here? And let's say, you know, this is the last tax return and we're that we have, and we're sitting there in 2023, you know, as a forensic accountant, my antennas are going up and saying, well, what happened to that money in Capital One? You know, if there's no money in Capital One today, it means it was moved, it was spent I don't know what happened. But these are the types of questions that a personal tax return will help you kind of put on your radar and alert you to maybe what are the next issues in the case.
Jason (00:26:17):
Something else that I found interesting was, is that there was interest income received from his children. So what does that mean? That means that it seems like Donald Trump probably lent money to his kids a lot of times though, you know, they may accrue it at the, you know, IRS applicable federal rate and he may not actually be receiving cash in terms of interest income. And I think a lot of that has to do with the fact that he doesn't want to get, to get taxed as a gift. Right? Let's say he gave $50,000 to Don Jr. Right? Like, he'll probably structure it as a loan and get paid back eventually because if he didn't, he may have to file a gift tax return showing the 50,000. But, you know, if I'm on the, if I'm a divorce attorney, forensic accountant, I'm asking for all the loan agreements with Don Jr.
Jason (00:27:04):
With Ivanka, you know, especially if I'm working for Melania, like maybe these are assets, right? Like maybe there's loans receivable that should go in in Donald's column and I should get in in equal or, you know, in equalizing asset on the other side. So, you know, I think some of the questions I would have if I see Don Junior Ivanka's, et cetera on Schedule B as I'd say, is there an asset there? How do I prove it? Is there an income component here? You know, so it's you really, I mean we only got started here. We're only on Schedule B and we already have a lot of information. And I think that learning these entity names, I mean, we could, you could start researching entities who people are involved with, you know what I mean? Like, there's a lot of layers that we could go here and, you know, if we have to value this marital estate, any company that we see here, we're gonna want multiple years of tax returns potentially operating agreements, K one s you know, depending on how much they control, you know, maybe we would expect to see greater level of information, maybe general ledgers, maybe bank statements.
Jason (00:28:10):
I don't know. You know, every case is, is so different, but once you start multiplying all the information that we would want times the number of years that we would want it, for times the number of entities, I mean, I think you and I could combine the resources of both our firms and we would still be shorthanded if we, if we received the divorce case of this magnitude.
Melissa (00:28:30):
Well, and it's interesting because there was interest from Ivanka Trump, there was interest from Donald Dre Trump Jr. And Eric Trump. And I think the interesting part also, like if we drill this down to a smaller business mm-hmm. <Affirmative>, you also will have family run businesses. You will have, you know, partner loans. You will have the, the, the company is paying out more to the family and maybe they owe money back. But then you say, okay, well if you really have these intercompany loans or these shareholder loans, and is there a documenta, like is it a real loan? You know mm-hmm. <Affirmative>, did you, did money really change hands? Does, is there a document that is supporting this loan? Is there an interest rate applied? Is there interest being accrued? Is there interest being paid and reported? Like all of those are questions. So in this particular case, you might see those names on there and say, well, maybe there is a loan back and forth. Maybe they, they have declared some interest and that would be some of the support for that intercompany loan or that shareholder loan. So sometimes we're also seeing it in that capacity. Right?
Jason (00:29:41):
Absolutely. And a big, a big you know, tricky part of a lot of cases, especially when you're dealing with levels of money, like what we're seeing in front of us, you know, figuring out the loan situation because there's a very fine line between what's a capital contribution, what's a loan, you know, what's a distribution, what's a, a receivable, you know, so there's a lot of gray area, you know, the same cash payment could be interpreted different ways. And sometimes figuring out these intercompany loans and whether they have a, a bonafide business purpose and, and figuring out just what the balance is, you know, sometimes it's just really not easy and it, it ends up being a very challenging part because I think, you know, even though these people have millions of dollars and maybe billions of dollars, I don't know. But I think that it's still run like a family business, you know, it's still, I mean, I've seen people with billions of dollars of real estate and they run it like, you know, you'd run a, you know, a local hot thought stent. You know, it's, it's, you'd be surprised at how, you know, disorganized people could be with, with these types of things. And you get a family that starts amassing this wealth and real estate and they keep buying stuff, selling it, buying more stuff. You know, it's easy to kind of lose track of, of these things, you know, as they happen over the years.
Melissa (00:31:02):
Mm-Hmm. <affirmative>. Well, and, and this is more of the, I mean, just to continue to show the, the number of entities that you would have to be looking at. Another piece of this though is looking at some of the other in, you know, like, so you have interest income, you have business income, you have W2 wages. Now we also have ordinary dividends, which what I'm seeing in some of these is it's, it's talking about Donald Trump, Elizabeth trust, Donald Trump, Fred Trust Elizabeth Trump grandchildren, which I would assume is also a trust. Mm-Hmm. <Affirmative>. So like, what is all of this telling us is happening from, from a divorce perspective, if it were, if we would see this?
Jason (00:31:47):
Yes. So, you know, the trusts are going to come into play, you know, especially when you're dealing with the super wealthy and you know, trust come into play a lot of times because, you know, there's, as you know, when you give something to an irrevocable trust, it's not yours anymore. You know, you may be paying taxes, it may be showing up on your tax return, but you, you don't really have control of those assets in a lot of instances. And, and I'm by no means a trust and state attorney, and I'm not giving any legal advice. But there's, I've seen it before where sometimes people will, you know, they'll, instead of giving it to their spouse, they'd rather set up a trust for their kids. You know, something that I would try to understand, you know, if we're dealing with the situation, there's a lot of trust involved and, and there's maybe a dispute as to, you know, what's going on there.
Jason (00:32:35):
You know, I may wanna look at, you know, are they really operating this as a trust or is, is the trust kind of a front meaning like, you know, this, this entity could be in a trust, but really the owner just keeps running it like a family business spends money on perks, does whatever they want, because, you know, a trust, you know, there's a certain concept, you know, having a, you know, a special duty, a fiduciary duty you know, you see lawsuits all the time, people breaching trust. You know, so the trusts are important. You know, probably getting into all those details there, I'm not the right guy to, to do that. But I think it's important in any divorce to identify what do the assets, what do all these assets own? What do the trusts own? What do they control? You know, maybe the trust controls some of these companies that, that the Trump's report on their tax returns.
Jason (00:33:24):
So that could be extremely relevant. You know, if someone has a trust, maybe that impacts their, their need for alimony, right? Or their need for child support, or something along those lines. So I think it's, it's important to <affirmative> know about the trust, figure out what they own. You know, I also think it's interesting because, you know, for people are always talking about whether he got a, you know, he had any help from his family or anything like that. And I mean, I see trust here, whether I, whether, you know, he benefited his career from that, I don't know. But I think it's, it's interesting to see trust reported and, and he's receiving dividends from those trusts.
Melissa (00:34:05):
Well, and trust to me in a, in a divorce proceeding mean a lot of different things. One is you have very, very advanced estate planning for high, high net worth wealthy families, especially generational wealth that protects those, those monies from transferring through the family and protects them from divorce in some capacity. So it is, you know, like in some of the cases that we've dealt with, we've brought in trust attorneys, like it, you can't make the assumption that just because you do family law that you understand the nuances of a complicated trust. The other is what assets do it does it own, but how much control does any of the p people in the marriage have? Because in some trusts, yes, you may be receiving something, right? But how much control or ownership and are just because if you are, you, just because you're being taxed on it doesn't necessarily imply control or power or the capability of splitting the asset in a divorce. Like those two things can be very different. And then the trust could protect itself a little bit from you even getting to the documents, you know? Absolutely. If that, if one of the parties is not an owner of the trust, but is paying taxes on the trust, like, could that happen?
Jason (00:35:31):
Absolutely. And you know I think it's also important from a discovery perspective, right? And I think you, you mentioned it before where there's trust, there's trust tax returns, there's trust agreements, there's appraisals, you know, so there's a lot of stuff that comes along with the trust. Like let's say I'm looking at this now, I may want trust tax returns for these trusts. I may want all the trust documents. You know, these may be a little older, you know, it looks like it's from his parents. So we may not have appraisals, you know, but I think when, when I see the, the terms trust, you know, my ears perk up because I start thinking, well, what documents do I need to get to really understand what's held by the trust? Who controls
Melissa (00:36:13):
It? Well, and people don't understand that yes, we're in there for a divorce, but what evaluators do, like the, the base, the the, where you cut your teeth on getting valuation experience is for doing gift in a estate returns that involve evaluation. And so what I think people need to understand is typically when you're putting assets in a trust in any capacity, you're probably gonna have to value it to place it into that entity. And so that's what we're talking about, that there could be an appraisal or a business valuation is because it literally could have had one whenever it was placed in, and then you're following, was it really a gift? You know, so gifts inheritance and, and such, the income flows and follows different in the divorce than they do in other situations. So you're kind of mixing all of these issues in one situation, but you have to be mindful. There could be valuations, there could be a specific reason why that trust does not want you in two its books. I've had full companies protected from divorce by being in trust that were very adequately protected. So you can't make an assumption that you're just gonna break the trust or break all of these documents. You know, like it, it's all accessible in a divorce. Some of this is done really well, getting a trust attorney or somebody that understands it, the valuator, those should understand it, right? Like the valuation person should understand it for sure.
Jason (00:37:45):
Mm-Hmm. <affirmative>, absolutely. I mean, we may not be the same level as the trust and state attorney, but this is, you
Melissa (00:37:51):
Know, this is the trust is gonna, the trust attorney is gonna be for the legalities of the ownership, like the legalities of the control, like all of those, like reading the actual trust documents, like you can have, obviously we do that for the valuation, but make no mistake having somebody look at it from an estate perspective as well, because there not all of this is done well. Mm-Hmm. Not all of estate planning is done well, especially if it was done in, you know, the 1950s or sixties or seventies. It just may not hold as well in protecting them in the divorce. It could still protect them from an estate perspective. Mm-Hmm. <affirmative>. But the divorce is the issue when you have like a third generation divorce that comes through and they're like, well, I want everything. That's where I think you have some of these issues.
Jason (00:38:41):
Absolutely.
Melissa (00:38:43):
Okay, so what is the next, so now we're gonna go to a Schedule C. And so if you're doing a divorce and you own a business, you could either have a business tax return that sits out there in Lala Land and you file with the I irs, right? I'm sure you'll tell us more about those. Mm-Hmm. <Affirmative>, or you could have a Schedule C. What the heck is a Schedule C, Jason?
Jason (00:39:04):
So Schedule C are, are either sole proprietorships or single member LLCs. You know, when you think of your typical llc, you think of a one man doctor's office or you know, a hot dog stand. And in this instance, you know, it looks like they run a plane through the Schedule C. And I just think it's funny because I think that, you know, we have this preconceived notion of what Schedule C businesses are, but the super wealthy, they, they do their own thing, right? They have different plans, you know, and I, I've actually seen this before, you know, with other super wealthy and, and there may not be anything illegitimate about it, right? Like maybe they used it for business purposes, and this one 60 is actually, you know, just reimbursed for, for flight charges, right? Right. so it may be legitimate, but you know, where there's just like, just like the truss, right?
Jason (00:39:58):
Where there's planes, there's flight logs, there's all types of good, you know, types of discovery that you could get. You know, also what's important with Schedule C is that you don't have to file a balance sheet with your Schedule C. So, and this is any Schedule C, no matter how big or small, you don't have to file a balance sheet. And I'm sure you, as you know, as evaluation professional, the balance sheet's really important to valuation. You know, there may be, let's say there's a plane in this entity, right? There's a plane that we need to worry about. There's potentially liabilities. There could be a cash account, there could be a bunch of other fixed assets besides a plane, but you're not gonna get any of that from looking at only Schedule C. So I think the moral of the story for Schedule C is, is that they may not be what you expect, right?
Jason (00:40:46):
Like this is a plane company. B what you do get on Schedule C is incomplete. You're gonna have to get a lot more information. But, you know, something that I've made a mistake on when I was coming up in the business that I, I think other people should know is, right, like if you report on Schedule C, there's gonna be no tax return for that company. So like, don't, don't make a motion to, to compel discovery on getting the tax returns for DT and TE one LLC because they don't exist, right? So I think that's important, right? Cause no one wants to look stupid you know, asking for documents that don't exist. And also, you know, what we see here is right, $160,000 in gross receipts. We don't know know who that $160,000 came from. Did that come from Trump himself?
Jason (00:41:37):
Is this an actual business entity that serves customers? I mean, my gut tells me it's not. But it could be, right? Mm-Hmm. <affirmative>, I mean, we don't know where this, I mean, you'll see here it looks like 160 in 160 out. You know, we don't really understand the true nature of this business because these, this $160,000 number, this is a summary level number, right? Mm-Hmm. <affirmative>, like, we'll need extra documents such as general ledgers, maybe even account statements to see where, which entity did this money actually come from, or what person and where did this money actually go? So I think that Schedule C, it gives you some good information, but you know, it requires an additional level of due diligence and discovery in any instance. I just thought it was interesting that there was a plane on this one, but you know, often you'll see small businesses, single member LLCs on Schedule C.
Melissa (00:42:31):
Well, and this may look like the same one mm-hmm. <Affirmative>, but this is for Melania Trump's modeling business. Mm-Hmm. <Affirmative>. So you'll see these more often, like, like as a solo practitioner, as a plumber, as a, an electrician, right? As certain things Uber
Jason (00:42:51):
Driver side hustles.
Melissa (00:42:53):
Yes. All of these things. Like you're, you're building the business. So what are you providing to the, so, so here's a couple things that also come up. When people, when people are looking at this, they're like, well, you know, in this, in this particular situation, I think it shows she made like $3,500. So somebody paid her like one time to do something and she doesn't have any expenses. But a lot of times people would be like, well, they lied. They lied on there. Mm-Hmm. <affirmative>, that's a lie. Like, they didn't book everything like they, that, that, that car, they drive that car personally, or, you know, that paid for marketing, but it was really, you know, Cardinals tickets, things like that. Right? And is just because it could be booked different on the tax return, does that mean that it's lies?
Jason (00:43:47):
I mean, I think there's, you know, if they paid personal expenses and wrote it off and took a tax deduction for it, that's lying. I, I'd say, I mean, I'm fairly certain that's lying, but you know, what, if, what if melania's modeling, 99% of it is done through one of those LLCs that we were talking about before. We don't know, right? Because part of the reason why wealthy people like LLCs is because it disguises the true nature of the business if disguises the ownership. And I bet if you start looking up those LLCs on Google, you're gonna like run into a brick wall of like Wyoming or Nevada or Delaware LLCs that are owned by someone else. So like, you're, you're gonna have a hard time figuring it out, you know? Yeah. Florida tends to be very easy, I'd say, relatively speaking, because you could go on Sunbiz and figure out like who these entities are registered to and, you know, you could look at addresses, but, you know, I imagine if they want privacy, which they probably do as you know, first Lady and president of the United States at the time you know, they probably want privacy.
Jason (00:44:51):
And the, they're, they got this figured out, you know, they're, they know what they're doing and they're, they're gonna make it. So it, it's hard to, to figure out. And I think not only from a, I don't know that they're doing it to fool the irs, but I imagine it's also for liability reasons. You know, they don't want to personal, they want to have a bunch of LLCs in between them and the business.
Melissa (00:45:15):
Yeah. And you, and you do have cases where, you know, at the, I mean, everybody's doing their taxes probably now, and they're taking all of their paperwork to their tax accountant. And I think in a divorce, you have to be aware that sometimes it is like the business owner is self, you know, proclamation their expenses. They are, they are producing that information to the accountant. And depending upon whether the accountant does their own due diligence, they're just taking that information. So I think that they, that people think there's the, the, these beautiful like steel doors that you have to go through and, and produce the right information for your tax return. But that's not true. Like, these are just still numbers that looking at the underlying, like asking more questions and getting more documents if it doesn't make sense, you know, like how do you support a, do a schedule C?
Melissa (00:46:08):
Go look at the bank statements. Mm-Hmm. <affirmative>, they reported $3,000. If she's got a bank statement that has a hundreds and hundreds of thousands of dollars going in, where else is this income flowing through? You know? Absolutely. So you can still ask the questions without making the assumptions that we don't really know, you know? Mm-Hmm. <Affirmative> until we ask the questions. Now, you had a couple more things that we don't always see a lot of, but you might see especially in where you have businesses, right? And so when you have losses and you have losses that you can't necessarily take in a certain year, you might have a carry forward. So maybe you wanna tell us a little bit about, you know, why this would be important for a divorce attorney?
Jason (00:46:53):
Absolutely. So, you know, this kind of goes back to where we were talking about with the refunds, right? Like there, there may be kind of, I wouldn't call it a hidden asset, but it's kind of, you know an asset that you gotta think critically about to really not get creative, but try to figure out is there any assets here that aren't reported, right? Mm-Hmm. And you know, something that people that are, like, we spoke about taking losses on investments, real estate, LLCs, things like that, they generate losses that can accumulate and be used for, for future years. So just like the refund can be used for future taxes, these losses, you know, may or may not be able to use to be applied to certain income. So, you know, if I'm Melania's forensic accountant or her attorney, you know, I'm gonna make an argument that, hey, there's, there's an asset value here for these losses that were generated, let's call it during the marriage, right?
Jason (00:47:54):
Eight. If you're looking at line two, you know, there's 8.7 million in carry forwards. Let's just assume it all happened during the marriage. That can be applied to future gains. You know, and you spoke about that depreciation or recapture, right? Like, let's say they sell Trump Tower at a huge gain, they may be able to, and I'm not a tax expert. I'm sure there's all types of rules that go into it with passive and active and things like that. And that's, that's beyond the scope of this conversation. But I think it's important that, you know, if I'm in this situation, right, I've identified that there could be an asset here. You know, I have a number of 8.7 million. You know, the next step in this situation was I'd probably say, Hey, let me talk to their accountant. Let me really dive deep on this. But like you brought up before, sometimes it's just all about asking the right questions and, you know, putting things on your radar.
Jason (00:48:46):
You know, sometimes I think people get overwhelmed with reviewing tax returns. Cause it's like, well, how am I gonna know all of this? Right? Like, you don't need to know all of it. You need to understand where you need to ask the questions. Mm-Hmm. <Affirmative>. And I think that, you know, a lot of the times your questions are not because you don't know what you're doing, it's because you don't have additional information, right? Like, we'll wanna probably look into which assets generated these losses, you know, under what circumstances can these losses be used? You know, can they only be used for certain things? So these are all things that I'd want to investigate, ask questions, talk to people about. Because it's 8 million is a lot of money. Yeah. And, and when you're wealthy, you might be able to use that.
Melissa (00:49:34):
And again, it still is saying that they still have like 56 more million that they can carry forward. And so, you know, like we had a case where we went against an expert that said a client could make, you know, $650,000 for the rest of their lives and never pay taxes. And you have to know if that's true or not. Mm-Hmm. <affirmative>, is that the reality? Now, in the documentation that we had, it was not the reality. It was that they were, they had gone through that carry forward and now they were in a taxable situation, right? Mm-Hmm. <affirmative>. But another thing that can increase that capacity, you know, that you can borrow basically from the company could be debt, it could be other factors. So again, you know, like we're belaboring this point, but a number on a tax return does not ever tell you the whole picture.
Melissa (00:50:31):
It gives you a clue of where to go next. But it, it really is just the tip of the iceberg because, you know, for these guys, are they never gonna pay taxes? I can't necessarily say that that's true. Like this carry forward could be only applicable to certain types of situations. You mm-hmm. <Affirmative>. And, and as the other thing is, if you are the attorney or you are the person going through the divorce, you have to advocate for your, the process. If you don't understand something, and it's a little bit above your pay grade, pull in somebody else that can give you that information or you can understand it fully or ask for more underlying documents. You don't have to just stop in that capacity because some of these things you're not always going to see, you know, this is another a Schedule E that people might see. And, you know, let's talk a little bit about what, what does this look like? What, what is the purpose of this? Like, what is this telling us, if anything?
Jason (00:51:33):
Absolutely. So, you know, when we're looking at Schedule E, schedule E includes rental real estate, royalties, partnerships, s-corps, estates trust. The particular page that we're looking at is not rental property. It's actually royalties. So, you know, what this tells me is that there's a stream of income coming to Donald Trump from royalties. You know, if we look at line 19 and column A, the the first column, you know, we'll see that there's a book writer fee. So my assumption, and you know, what happens when you make assumptions, but for purposes of this discussion, you know, there's $133,000 in royalties coming in. There's $44,000 in book writing fees going out. So I'm sure that this relates to a book that he's written or will write or, or will release or whatnot. But it's important because I'm gonna wanna understand, as a divorce forensic accountant, what's the, what are the royalties related to it?
Jason (00:52:30):
Are these gonna end in two years? Can he reasonably be expected to receive about 90,000 income from these royalties? You know is there an asset that he's, are, are these gonna continue into perpetuity? And there's, you know, potentially a intangible asset that we need to divide? You know, maybe there's value to this intangible property that he's receiving royalties from. You know? And I think that opens up a whole other can of worms in between what's income and what's an asset. But I think nonetheless, it should kind of make your antennas go up and, and start asking questions in terms of, well, what are these royalties for? How long are they gonna last? What documents should be available that could help explain these royalties? So, I mean, this is interesting. You don't see this every day. You know, I don't think Trump will be able to say he wrote his own book because there's a, a book writer fee. So, I mean, you know, there's all types of little things that you learn in a, in a tax return, right? Like, who is the book writer fee paid to? You know, maybe, I don't know, depending on how litigious people may get, maybe they, they wanna know what was said or what was provided to the book writing company, right? Numbers,
Melissa (00:53:47):
Numbers always tell a story. They always tell a story. Like they don't tell us the whole story. Was it a book already written? Is it a book coming up? But we can clearly see that it happened in 2020, and what is the result? Things like that. So, I mean, I think that that is, I think that's one of the most interesting parts of it. Like, hmm, interesting.
Jason (00:54:09):
Yeah. And, and it, it's like the, you know, we're looking at a 350 page document and you know, you're looking at one centimeter of text, right? I mean, it's pretty crazy how much information, you know, in this huge document full of a lot of information that quite truthfully, most of it you don't really need as a divorce lawyer. Right. but
Melissa (00:54:32):
There's little tidbits. Yeah. But here's the conversation that happens. We go into the meeting with the attorney and we're like, Hey, did a husband write a book? And they're like, what? We're like, yeah. Did he write a book? Is he getting royalties? Because it looks like in 2020 there was something, you know, because that could be, again, in some of these, you, you are catching people in not disclosing everything. So now you go back to husband and say, Hey, did you write a book? And be like, oh, right. Yeah, yeah, I did. You know, so what implication that does that have for future income? What implication does that have for the marital rights mm-hmm. <Affirmative> to something like that. Like the implications are vast and wide, but it could be just initially to identify that there was no disclosure of that fact. Mm-Hmm. <Affirmative>. And the reality is, as much as you think that somebody can get away with things and do things deviously, it's usually in plain sight. Like there's a trail, there's a path, there's something, they might not have thought that that was a big deal because maybe that book deal failed. Maybe it never went anywhere. Right. And you're assuming it's sitting out there with some value. Like my current client, you know, somebody bought a bunch of gold where the gold bars, well, you're making a leap that there are even gold bars. Let's first ask the questions and then see what pipeline it takes us down. Right?
Jason (00:55:56):
Absolutely. And, and also something to keep in mind is like, you know, Donald Trump himself is probably most likely not involved in the day-to-day preparation of his taxes and finances. Right? So maybe some staff level accountant filled this out because they had a 10 99 received, right? There's, they received a 10 99 from royalties for 133,000. And you know, they may have just put it in there cause they assumed it should be there, but there could be a disconnect, right? Between what you know, Donald Trump, the individual is actually telling people, right? Mm-Hmm. <Affirmative>. And he may not know, you know, exactly the nuance of what's there. And that's a way that sometimes people slip up. You know, if he said, oh yeah, I wrote that book. That was all me. I was up until midnight 2:00 AM writing that book every night. I'd say, I don't know. I mean, I'm looking at line 19 there, there's a book writer fee. So, you know, maybe the accountant put it in there. So, you know, it's, it's interesting. And I think that with, you know, especially divorce
Melissa (00:56:57):
And if you, yeah, if you wonder where these attorneys come up with these questions, it's gonna be like that. They're gonna walk you down the path. They're gonna be like, did you write a book? Did you pay somebody to write a book? Did you involve somebody at a pirate book? Did you get any fees to write a book? They're gonna ask you that in deposition. As a business owner, you have to be aware that you're gonna be asked questions. So for you to try to not disclose the truth, it's going to catch you. Because then they're gonna bring this paper up to you and they're gonna say, so it looks like you did write a book. Mm-Hmm. <Affirmative>, or you did pay somebody and he's gonna ha you know, like in this case, the business owner would've to be like, well no, I didn't prepare this.
Melissa (00:57:33):
I don't know how this, you know, like, that was my advisors. Maybe they paid for something. But in smaller cases you would know and you would've not disclosed that and you would look like you were being deceptive. The appearance of deception is worse than the reality of deception in some cases, especially in a divorce. And so some of these things could come back to bite you. I think we have one more decent slide about, you know, the, where the businesses are from a Schedule E perspective. And this is starting to list some of them. I don't know if we wanna talk about some of these and what the additional schedules, you know, cover at the end of the or or what to continue to look at. Or maybe we've talked about it enough. But tell us, you know, what else we should have known or, or to look
Jason (00:58:23):
For. Absolutely. So, you know, we kind of hit on this earlier when we were talking about Schedule B, but you know, schedule B is only gonna really report interest income, right? So that's gonna be like we spoke about mi Mar-a-Lago club before, right? So that showed the interest income received from Mar-a-Lago Club. But in Schedule E, now we're talking about what's the business income received from Mar-a-Lago Club, right? So Mar-a-Lago club, let's assume that it's the Mar-a-Lago that we're all thinking about. That's a country club, right? So they're probably making very little income in terms of interest because they're not a banker or they don't own debt. So, you know, you may see items that are on Schedule B cause they don't report income, but they're on, they're on Schedule E because they're business income. So Schedule E's gonna report all the business income and just like the interest, it's not cash received, it's business income allocated to a partner for tax purposes.
Jason (00:59:21):
And just like Schedule B, we have to get all the K one s to really understand what cash was actually received. And if we really wanna understand the nature of the business, its income and its expenses, we're gonna need tax returns, financials, general ledgers, you know, I think on every single one of these companies that we see here, you know, if we're gonna go the full distance and value everything in this marital estate, we're gonna have to prepare valuations for all of these companies. You know, these may be companies where he's a passive owner and he owns 1%. And some of these companies may be things that he owns a hundred percent, right? So, you know, it's gonna come in. What also comes into play a lot in divorce situations is like, okay, well I could assume I could get anything from Trump Plaza llc, cuz like, he probably controls it, right?
Jason (01:00:10):
But if I look at 57 line AF 57 Management Corp, he may be a 1% interest owner in, in that company and he may only get a K one every year. So, you know, something that also to think about is, well, can they get the documents that you would want? Do they have access to them? Can they control these things? And you know, I think it's Schedule E is important. I mean, we covered a lot of the main concepts in terms of you know, cash flow income in the K one s and whatnot. But you're gonna mostly see, I think, business interests that people own and schedule E and you're, if, if you see it on a tax return, you're gonna want to put on your radar. And, and partly because I think, I think it's important for everyone to realize, right?
Jason (01:00:57):
Like, you're not gonna find assets on a tax return if they weren't reported, right? So, you know, it, it's also like you wanna develop this list using the tax returns because then if you see another entity, right? And you don't have it on your list, you're gonna be like, well, why wasn't that reported on the tax return? You know, you'll start saying, Hmm, you know, and you know, that's why, and I've stressed it throughout this podcast, is it's all about building that universe. You know, a lot of what we do as forensic accountants is, is we cross reference things, right? So tax returns a great starting point. We have a list of 200 companies that the Trumps own, that's like our hub. And then any other information that comes to our way, we're checking it to our hub, right? So yeah, we're consistently looking and building and packing that snowball until we fully understand all these companies, the nature of their assets, what they're worth, what the cashflow being generated from them is. And you know, I think that's why, and, and I hope that people throughout this podcast that are listening realize the importance of the personal tax return. You know, it's not the end all be all. A lot of times it, it creates more questions than answers, but it's a good place to start, in my opinion. And it's, it's really one of the first places that I start on every single divorce case.
Melissa (01:02:15):
Well, and I, and I think it's, it, it really is interesting because you've talked like this is a listing. Like we would look at the tax return and be like, okay, you know, you own a bunch of businesses you've now filed for divorce. One of the things that you don't understand is that either attorney has to hire an expert evaluation person, somebody who would not has knowledge about the state that you're getting divorced in, right? If you're getting divorced in Florida with Jason, Jason's gonna know more about Florida. If you're gonna get divorced in Missouri or Illinois, I'm gonna know more about that. And if you're getting divorced in another state, you might need to reach out to somebody in that state. But the reality is we're given this list all the time. It doesn't mean that we have to value everything. It means that we have to do enough due diligence in professional care to say, okay, is there value here?
Melissa (01:03:06):
Is, are the underlying assets being fairly represented in the financial picture? And judge, what should we do about all of these things? And so sometimes you're coming in and saying, eh, this is just like one entity that has one piece of property and somebody just said yesterday, this is how much this property own it, you know, is worth great. That might be a real easy situation. And then you might have other ones that are running full operations of businesses. And so I think that you have to get somebody coming in that can start to decipher because your attorney can look at the same list and you could look at the same list and say, you know, I don't really think there's a lot of value in that L L C, but if you miss a nuance of the information and it was, it wasn't no value, it was a million dollars of value, you're hoping that your forensic accountant, your valuation expert or something is going to find this information. And so it, it isn't as easy. There is plenty of places to hide information, you know? And so just as an attorney to assume that, well, I've looked at a lot of tax returns, I'm absolutely gonna be able to see if, you know, they have assets or they have income. These are the easy pieces. The problem is if you make assumptions or a conclusion based on those pieces and you don't have an expert looking at it, it could, you could have an issue, right? Absolutely. And absolutely. So that's where we're coming in to play.
Jason (01:04:47):
Yeah. Because you know, there could be an LLC here that reports negative 2 million in income and he could have received $50 million in cash that year. I mean for all we know. I mean, I'm using big numbers. Yeah. But you know, it's a big tax return. I wouldn't be surprised if those types of numbers are flying around here.
Melissa (01:05:05):
Well, and it's almost as if we kind of have to start to look at the K one, like the next analysis of this is looking at the K one and the cap account, you know, and looking at what does that information tell us? Because some of that information in there could give us a clue to a range of value, a reasonable range, right? Mm-Hmm. <Affirmative>, like we might be able to identify that, but people don't understand that. We have to see it. Like we have to see the totality of the information and then say, oh, okay, yeah, it is that direction or no, this one piece switches everything. But Jason, this has been super amazing. I do want people to know that you are an amazing resource. So tell us about where your focus and your practice is focused and how they can reach out to you.
Jason (01:05:59):
Absolutely. So if you'd like to learn more about me and my firm, you could visit us at www.divorceforensicaccountant.com. And our website is kind of describes exactly what we do. We do divorce, forensic accounting, and business valuations for divorce matters. And we really pride ourselves on, on providing clear, you know, answers to complicated questions essentially. And you know, I really enjoy the divorce space. You know, it really matters, you know, you're, you're kind of helping people through the hardest time and that's why I love it and I decided to specialize in it. You know, I, I really felt that, you know, in order to, you know, I had to be all in to, to help people through these hardest times in their life. I had to be all in and, and just be passionate about and have a smile on my face while I'm doing it because I think clients clients like that.
Melissa (01:06:52):
Yeah. And I think that, you know, if, if you have a simple issue, I think that you can reach out to, you know, one of us or anybody in your area, I think it's also from an attorney standpoint, you don't know what you don't know. So, you know, saying I can't look at this tax return like an expert is, is is perfectly fine. Like we know that nobody totally understands what we're looking at. But I think also identifying that you're in over your head is the biggest issue getting somebody that you trust that you can pull in on these situations. Cuz I know I take calls all the time from an attorneys that I do big cases with and they'll be like, oh, I have a question. What about this? On the tax return, I'll be like, eh, no big deal. Or mm-hmm <affirmative> that, that's a big deal, right? And then we figure out what to do next. It's, it's sort of like identifying the problem. But I do appreciate all the information that you've provided and it was interesting, I think that we barely scratched the surface Absolut, so Absolutely. Hopefully, and you have a podcast, right?
Jason (01:07:59):
Absolutely. We're we're dropping it I think in a week or two. You know, maybe by the time that this comes live, it'll be on, it's called Find the Money Podcast, and I plan to have Melissa on as well. I'd like to learn all about valuation mediation.com and all the stuff that's going on with you. Yeah, I know. I'm excited to learn about that as well, and I'm sure our listeners are as well.
Melissa (01:08:23):
Yeah, that's awesome. Well, I, I think it's great that you have podcasts, finding the money. People love forensic stuff and people also want forensic tools of how to help find the money in their own divorces. So I think we'll continue talking about this subject and you know, helping people maybe do some of the work themselves. So I appreciate you and we will see you again on your podcast or mine,
Jason (01:08:49):
<Laugh>. All right. Thank you. Thank you everyone. Thank you for having me.
Melissa (01:08:51):
Thanks Jason.
