Trump’s NY Businesses Retain Their Federal Tax Classification

In the highly publicized business fraud case against Donald Trump’s business empire, the New York State Supreme Court initially implicated, but finally avoided, a long-standing federal income tax issue: whether the state law judicial dissolution of a corporation changes that entity’s federal income tax classification — in its February 2024 final judgment imposing fines but withdrawing from its September 2023 summary judgment a directive concerning cancellation of certificates and dissolution of Trump entities.

The Court had granted the summary judgment in favor of the New York Attorney General, alleging persistent fraud, such as overvaluation of the ground lease of 40 ...