Donald Trump's Very Yuge Tax Problem

[RavenSky]

I thought we had a thread about Donald and his tax returns, but couldn't find it...

Here's the next chapter in that saga

The New York Times have somehow unearthed Republican nominee Donald Trump’s 1995 tax returns, which show the billionaire declared a stunning $916 million loss. Under tax incentives set down by the federal government to encourage investment and minimize losses to big businesses, companies are allowed to deduct losses from their taxes. In that year, Trump paid no taxes – and the size of Trump’s gargantuan loss means that he was able to legally pay no taxes for the next eighteen years.

It also proves that Donald Trump is not nearly as good a businessman as he says he is – or that he was purposefully sabotaging his companies to make himself the “king of debt,” as he has called himself.

Indeed, by 1990, his entire business empire was on the verge of collapse. In a few short years, he had amassed $3.4 billion in debt — personally guaranteeing $832 million of it — to assemble a portfolio that included three casinos and a hotel in Atlantic City, the Plaza Hotel in Manhattan, an airline and a huge yacht.

Reports that year by New Jersey casino regulators gave glimpses of the balance sheet carnage. The Trump Taj Mahal casino reported a $25.5 million net loss during its first six months of 1990; the Trump’s Castle casino lost $43.5 million for the year. His airline, Trump Shuttle, lost $34.5 million during just the first six months of that year.

Clearly, Republican candidate Donald Trump has ‘leveraged’ his massive business failures into a golden parachute of tax free living.

 

[T.G.G. Moogly]

That whole Melania thing must have cost him a lot of money.

 

[Nice Squirrel]

He is the only person who did not make money in the 1990s?

 

[T.G.G. Moogly]

Seriously, this is a bombshell but it is not surprising. The next debate should be interesting, about how this great businessman who wants to "make America great again" doesn't pay taxes because he allegedly lost a ton of money on his business ventures.

 

[iolo]

Thieves don't pay tax - they pay accountants.

 

[whichphilosophy]

This is more interesting than him acting in a porno movie. However does he have a 'tax problem' if he doesn't have to pay tax for the next few years.
See what the IRS audit says if it disagrees.

 

[Loren Pechtel]

To me the real issue here is that it certainly seems like this is the debt he managed to offload by having his company buy the bleeding properties. I don't mind loss carryovers if they're real but I don't think he actually lost the money.

 

[Axulus]

To me the real issue here is that it certainly seems like this is the debt he managed to offload by having his company buy the bleeding properties. I don't mind loss carryovers if they're real but I don't think he actually lost the money.

What is the basis for that assessment?

 

[T.G.G. Moogly]

This is more interesting than him acting in a porno movie. However does he have a 'tax problem' if he doesn't have to pay tax for the next few years.
See what the IRS audit says if it disagrees.

It's nice to know he's been monetarily supporting all those veterans he talks about. What a major hypocrite. Someone else paid for his Purple Heart.

 

[whichphilosophy]

He is the only person who did not make money in the 1990s?

With such large deficits, some of the funds can be squirreled away

 

[fast]

It's no wonder why so many people admire him.

He is smart, but so are broke college graduates who unfortunately have failed to realize the path to financial success isn't in obtaining higher degrees but rather in applying oneself. So, not only is Trump smart, but in addition to being smart, he has applied himself; moreover, he is financially successful--unlike broke college graduates making decisions unlike Trump.

It sure is nice living in a world where the consequences of our actions are not fully wrapped in fly by night moral judgements. Not every shade of opinion of our broke ass planetary co-inhabitants force our hands in the actions we take to further our financial success. We have laws with consequences for that. If actions are permissible and come with a fee, we play by the rules and pay our fees. If actions are impermissible, we decide whether or not the fine is worth making the most rewarding decisions.

Golden

 

[Harry Bosch]

Every American pays as little taxes as legally required. To me, Trump's scandal here is that he has portrayed himself as the savior of the white working class. However, he lost close to a billion dollars in a business venture! This will be a chink in his armor.

 

[RavenSky]

To me the real issue here is that it certainly seems like this is the debt he managed to offload by having his company buy the bleeding properties. I don't mind loss carryovers if they're real but I don't think he actually lost the money.

There are very few subjects where I agree with you, but this is one of them. Based on his known history (as posted in a separate thread), I think this is exactly what we are looking at.

 

[T.G.G. Moogly]

To me the real issue here is that it certainly seems like this is the debt he managed to offload by having his company buy the bleeding properties. I don't mind loss carryovers if they're real but I don't think he actually lost the money.

There are very few subjects where I agree with you, but this is one of them. Based on his known history (as posted in a separate thread), I think this is exactly what we are looking at.

The tax code encourages people to post big losses and then rewards them for doing so. That's fucked up.

 

[TV and credit cards]

The tax code encourages people to post big losses and then rewards them for doing so. That's fucked up.

And Donald is that shinning example of fuckupedness. What better way to bring it to the light of day.

 

[laughing dog]

The federal income tax code used to allow for income averaging over 5 years for all income but that was repealed in 1986 for almost everyone (except farmers and commercial fishermen).

Trump is, in effect, income averaging over 18 years on his investment income. It is a benefit for the elite - the very people he claims to be running against.

Trump is simply playing by the tax rules written by the very type of people he gave money too in order to have the rules written to support people like him. That is the problem. - it is just another example of his overt hypocrisy. This will not matter for his dittoheads and his partisans. It may matter to the hitherto undecided.

 

[Ford]

To me the real issue here is that it certainly seems like this is the debt he managed to offload by having his company buy the bleeding properties. I don't mind loss carryovers if they're real but I don't think he actually lost the money.

I'd say the real issue here is that while this looks bad, whatever is hiding in his tax returns must be worse. Not necessarily tax dodging, but something that makes tax dodging look tame by comparison. Whatever it is, it is damaging enough that the Trump campaign would rather let the New York Times frame the narrative than release his returns.

 

[Axulus]

The federal income tax code used to allow for income averaging over 5 years for all income but that was repealed in 1986 for almost everyone (except farmers and commercial fishermen).

Trump is, in effect, income averaging over 18 years on his investment income. It is a benefit for the elite - the very people he claims to be running against.

Trump is simply playing by the tax rules written by the very type of people he gave money too in order to have the rules written to support people like him. That is the problem. - it is just another example of his overt hypocrisy. This will not matter for his dittoheads and his partisans. It may matter to the hitherto undecided.

You have a false understanding of the tax code. The losses he claimed was on money that was already taxed (unless he fraudulantly made up the losses, of which we have absolutely no evidence of). In essense, he paid taxes on almost a billion dollars in the distant past, lost the income, but can only recover those taxes already paid in when he has income to offset it.

Additionally, this is not something that only the "elite" can use. I've worked with many small businesses that have lost money in a given year.

The way this is set up favors the government since they don't immediately refund the taxes previously paid in on current losses. The exception to this is that the government does allow losses to be carried back two years (meaning the taxes previously paid can be recovered on income earned in the prior two years).

Nothing reported in the NYT article I've seen discussed whether Trump had enough income in 1993 and 1994 to carry back his losses. Where are they getting the idea from that the losses were enough to offset 20 of income without knowing exactly what his income was in other years? They seemed to have made that part up whole cloth.

 

[beero1000]

To me the real issue here is that it certainly seems like this is the debt he managed to offload by having his company buy the bleeding properties. I don't mind loss carryovers if they're real but I don't think he actually lost the money.

I'd say the real issue here is that while this looks bad, whatever is hiding in his tax returns must be worse. Not necessarily tax dodging, but something that makes tax dodging look tame by comparison. Whatever it is, it is damaging enough that the Trump campaign would rather let the New York Times frame the narrative than release his returns.

This. It must really be terrible, and the more they refuse to release the returns the worse we must assume it to be.

 

[Horatio Parker]

I read a post by an accountant who said he'd guess Trump "parked" his debt. Meaning he sold it to an entity controlled by family or friend who would make no attempt to collect it. Technically, forgiven debt is income.