The left wing MSM is breathlessly reporting Trump’s massive losses from 1985 through 1994. They seem to have no concept of how the US tax code works. Trump is a real estate mogul. When you own real estate, you are entitled to huge depreciation write-offs on your tax returns. Big tax losses are the norm for real estate investors.
Since he was one of the biggest real estate moguls in the country, it would make sense he would have huge tax losses. There was also a massive real estate collapse during the 1990/1991 recession. That accounts for his bigger losses then. The tax code also allows for Net Operating Loss Carryovers, so future tax profits would be eliminated. That is why he would pay little or no taxes for a decade or more.
The IRS gets their taxes when a real estate investor sells their property and has to recapture all the depreciation taken cumulatively. As a failed condo real estate investor I experienced it in 2018. Even though I sold my condo at an $85,000 loss after 12 years of ownership, I had to report a capital gain on my tax return due to the recaptured depreciation.
So Trump’s tax losses are a tempest in a teapot and another nothing burger.
Trump claimed over $1 billion in financial losses from 1985-’94: report
Donald Trump reported massive financial losses to the IRS totaling more than $1 billion over a 10-year span when his reputation as a dealmaker was peaking, the New York Times reported late Tuesday. Citing figures acquired from IRS tax transcripts, though not the actual tax returns, between 1985 and 1994, the Times found Trump appeared to have lost the most money over that span than any other single American taxpayer.
“His core business losses in 1990 and 1991 – more than $250 million each year – were more than double those of the nearest taxpayers in the IRS information for those years,” the Times said. The losses were so big that Trump did not have pay any federal income tax for eight of those 10 years, the Times found. Trump was apparently in far worse financial shape at that time than he had let on, and reported negative adjusted gross income for all 10 of those years, ranging from losses of $4.5 million to $918.5 million. In all, Trump’s losses totaled $1.17 billion, the Times said. A lawyer for Trump told the Times that the figures were incorrect, but cited no specific errors.
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As I recall, Trump’s famous $1B loss resulted from an anomaly of tax law at the time that was eliminated shortly thereafter (championed by Hillary Clinton). This was actually detailed prior to the 2016 election by – of all people – the Failing New York Times. One of Trump’s S Corps owned some piece of real estate – a casino or something – that was initially valued at about $3 bil. It was leveraged to the hilt with financing. When the value dropped to about $2B or less, he sold it for a huge capital loss, but also negotiated a commensurate write-down of the debt. For individuals, that debt write-down would constitute taxable income, but for corporations- at that time – it didn’t. So he was able to take the $1B capital loss (which flowed from the S Corp directly onto his personal return) without having to take as taxable income (within the S Corp) the debt write down. The capital loss became a huge loss carryforward that he was able to use for many followings years to shelter other taxable income.
Since he had made only the tiniest of down payments on the real estate, he essentially got $1B of tax shelter with hardly any actual loss. It was a brilliant use of an existing tax loophole that was closed a year or two later when Congress made debt forgiveness taxable even to corporations.
What’s especially hilarious is know-nothing journalists and bloggers who periodically reference this “loss” as evidence of Trump’s ineptitude.
Most ‘journalists’ these days are butt ignorant, they are stenographers who write what they’re told to write with absolutely no interest in true research or fact finding. The ninnies at the NYT are attempting a ‘gotcha’ moment on a topic that they are beyond woefully ignorant of.
Heaven forbid that the liberals look at these numbers, the massive complexity of the tax code, and realize that taxation of income (slavery to the government) is not a functional way to fund anything. The peons that these folks pander to (those who actually do pay taxes), do NOT have the legal/financial resources to find and exploit the loopholes the way the rich (their target victims) always do, and so will ALWAYS pay more than the 1%. Add to that the control the 1% wields over the Congress and the folks who construct and implement tax code, and the situation only gets worse. True fairness (if there can be anything close), comes from the free market, NEVER from government.
“They seem to have no concept of how the US tax code works.”
Of course they do. Top to bottom.
Soviet Agitation Propaganda.
Remember that Pravda moved to the Potomac and Izvestia to the Hudson sometime in the last millennium. Same One World Globullist International Socialist Corporate Communist Empire Rulers, different decade.
Their world is ruled by envy, top to bottom. Hatred of the good for being good.
Tax returns are just the ‘hit and run’ topic of the day. Or moment.
Last I saw, with my geriatric recollection, the tax code is about 75,000 pages more or less.
One of my favorite looks for the upper tier of the economy is number of big iron corporate jets for sale. Always first to acquire when the CEO gets the drunk that won the lottery syndrome, and the first to go if things get tough. Site is comptroller.com. By big iron, I mean the $20 Mill. and up models. Big not used models, Dassault Three engine units, and the Bombardier big units.
Was watching it in the last down turn, or one before, and the number of jets for sale was grinding UP, as expected. Then inventory dropped dramatically for no obvious reason.
Bell went off a bit later when the tax law change came in for 100% capital cost write off in year one. Simple math is, buy a $50 mill. jet and put a $30 Mill. loan on it, and get a write off of 100% of the fifty for twenty out of pocket. My bet is Warren Buffet’s guys got that in for the fleet of 450 plus NETJETS fleet. Also my guess on his buying the second 50% of the railroad. Imagine redoing the depreciation schedule on all those engines, cars, track, roundhouses, etc. Also Bought The power company in Nevada. New depreciation schedule, for all the power plants, lines, facilities, etc. Shelter the obscene insurance company cash flow.
Thing is, he recovered spectacularly. DUH.
Several years ago I looked at the published tax returns for Zero and Biden and found little useful information-the information was about as useless as that offered up in campaign finance statements. So what that Zero had some entries dealing with foreign income-nothing was specific enough to indicate if that income was from a questionable or even illegal activity. The point is that very few people would have the skills to interpret a moderately complex tax return, let alone something like that which Trump would submit. Bottom line: who cares?