For the Record - Aug. 28, 2008

Trump-McMahon deal: An article in the Aug. 15 California section about Donald Trump buying Ed McMahon’s house quoted Michael Eisner, a tax attorney with Eisner & Frank in Beverly Hills, as saying that if Trump were to lease the house to McMahon at below-market rates, the cost difference could be regarded as income from McMahon and subject to taxation. What Eisner actually said is that the difference could be regarded as income to McMahon and subject to taxation. The article also said Trump could potentially incur federal gift taxes if he exceeded his lifetime gift tax limitation or gave more than $12,000 a year in gifts to a nonrelative. Trump could potentially incur federal gift taxes if the amount gifted to McMahon through reduced rent exceeded the annual exclusion, which is $12,000 per recipient, whether that recipient is a relative or not; however, any gift tax could be eliminated or reduced if Trump has not exceeded his lifetime exclusion amount applicable to gift taxes.